Ibovespa Rises to Seven-Month High as Stimulus View Boosts Vale

The Ibovespa rose to a seven-month high as Brazilian commodity producers including mining company Vale SA gained on speculation U.S. policy makers will maintain monetary stimulus.

Airline Gol Linhas Aereas Inteligentes SA rallied to the highest since May after a measure of profitability climbed in September. Steelmaker Cia. Siderurgica Nacional SA was the best performer on the MSCI Brazil/Materials index, which advanced the most among 10 industry groups. Tobacco company Souza Cruz SA fell after third-quarter earnings trailed estimates.

The Ibovespa rose 0.7 percent to 56,460.38 at the close of trading in Sao Paulo, the highest since March 18. The Bloomberg Base Metals 3-Month Price Commodity Index climbed 1.2 percent. A Labor Department report showed U.S. employers added fewer workers than forecast in August, adding to speculation the Federal Reserve will put off scaling back stimulus, according to Henrique Kleine, the head analyst at Sao Paulo-based brokerage Magliano SA.

“In the current scenario, people are more willing to take on risk, which explains why the Ibovespa is rising,” Kleine said in a phone interview. “I see a positive outlook for most companies. Take Vale, for example. Iron-ore prices should remain in a level that will keep supporting profits.”

The addition of 148,000 workers in the U.S. compared with the median forecast of 180,000 among 93 economists surveyed by Bloomberg. Unemployment fell to 7.2 percent, the lowest level since November 2008. The report, delayed by the 16-day federal government shutdown that ended Oct. 17, was originally slated for Oct. 4.

Gol Rises

CSN, as Siderurgica Nacional is also known, gained 4.1 percent to 12.40 reais. Pulp producer Fibria Celulose SA added 3.9 percent to 28.35 reais. Vale rose 1.3 percent to 32.80 reais.

Gol gained 6.5 percent to 11.96 reais after saying net yield, or the average fare paid by a passenger to fly one kilometer, increased 25 percent in September from a year earlier.

“Gol’s September traffic statistics look very encouraging,” Citigroup Inc. analysts Stephen Trent, Juliano Navarro and Kevin Kaznica wrote in a note to clients.

Souza Cruz lost 1.9 percent to 25.35 reais after posting third-quarter adjusted net income of 352.4 million reais, which compares with an average estimate of 441.6 million reais among analysts surveyed by Bloomberg.

Paper maker Klabin SA fell 0.7 percent to 12.02 reais. The company said in a regulatory filing it will invest 5.8 billion reais in a new pulp plant in Brazil’s Parana state, 500 million reais more than previously planned.

Bull Market

Fifty-two of the Ibovespa’s 73 member stocks advanced today. The real gained 0.1 percent to 2.1723 per dollar at 5:23 p.m. local time. Brazil’s benchmark equity measure entered a bull market Sept. 9, having surged 20 percent from this year’s low on July 3 through that day. The gauge remains down 12 percent in dollar terms this year, compared with a decline of 0.9 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Trading volume of stocks in Sao Paulo today was 6.42 billion reais, according to data compiled by Bloomberg. That compares with a daily average of 7.61 billion reais this year through Oct. 17, according to data from the exchange.

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