Ibovespa Rises as Brazil Tariff on Steel Imports Boosts Gerdau

The Ibovespa rose for the first time in three days as Cia. Siderurgica Nacional SA led steelmakers higher after Brazil increased tariffs on imports to safeguard the local industry.

Competitor Gerdau SA rose the most in six weeks as Vale SA, the world’s largest iron-ore producer, added the most in a month. Mills Estruturas & Servicos de Engenharia SA, a supplier of scaffolding and concrete forms, advanced as HSBC Holdings Plc. recommended buying the stock.

The Ibovespa rose 0.7 percent to 52,848.97 at the close in Sao Paulo, reducing this week’s drop to 1.7 percent. Thirty-nine of the gauge’s 73 stocks gained today. The real weakened 0.2 percent to 2.2114 per dollar. CSN climbed 3.3 percent to 9.78 reais, cutting its loss in the past 12 months to 13 percent.

“One of the main concerns about steelmakers is the increasing competition from cheaper imports, and this measure helps to address that,” Joao Pedro Brugger, a portfolio manager at Leme Investimentos, said in a phone interview from Florianopolis, Brazil. “I see room for further gains in these stocks.”

Brazil will impose surcharges on steel imports from some companies based in China, Germany, Finland, South Korea and Vietnam for as long as five years, according to a statement today in the country’s official gazette that cited anti-dumping legislation.

Petrobras Rating

Gerdau added 3.1 percent to 16.90 reais. The MSCI Brazil/Materials Index advanced 1.5 percent, the best performance among 10 industry groups.

The Ibovespa earlier dropped as much as 0.7 percent while Petroleo Brasileiro SA tumbled after Moody’s Investor’s Service lowered its credit ranking to Baa1, the third-lowest investment-grade rating.

The state-controlled oil producer’s shares rose 0.7 percent to 18.67 reais after sinking as much as 2.5 percent. The cut came a day after the ratings company lowered its outlook on Brazil’s Baa2 sovereign rating to stable from positive, citing signs of slow growth in Latin America’s largest economy.

A report today from the National Vehicle Manufacturers Association showed car sales in Brazil dropped 5.9 percent in September from one month earlier.

Mills rose 1.4 percent to 30.20 reais.

The Ibovespa will rise to 67,000 by the end of 2014, Banco Itau BBA SA said in a research note today, taking into account its share price estimates for the index’s members. Itau last year had predicted the gauge would gain to 75,000 by the end of 2013, according to the report.

The equity index entered a bull market Sept. 9 after rising 20 percent from this year’s low on July 3 through that day. The gauge is still down 20 percent in dollar terms this year, compared with a decline of 4.5 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.

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