Ibovespa Snaps Three-Day Drop as Petrobras Rises on Fuel Outlook

The Ibovespa rose for the first time in four days as Petroleo Brasileiro SA rallied after it sought approval from the government to raise domestic fuel prices.

Suzano Papel & Celulose SA advanced after the pulp producer posted a measure of third-quarter earnings that exceeded analysts’ estimates. Machinery manufacturer Industrias Romi SA jumped to a 19-month high after Banco Itau BBA SA raised its recommendation to the equivalent of buy.

The Ibovespa climbed 1.7 percent to 55,073.37 at the close of trading in Sao Paulo, with 58 of its 73 member stocks rising. Petrobras, as the state-controlled oil company is known, jumped 7.6 percent to 19.89 reais after Chief Executive Officer Maria das Gracas Foster said she has asked for policy changes that would allow prices in Brazil to follow international levels as earnings trailed analysts’ forecasts.

“Investors are thinking that, given how horrible Petrobras’s third-quarter earnings were, an increase in fuel prices is imminent,” Pedro Galdi, the head strategist at SLW Corretora in Sao Paulo, said in a telephone interview. “This could be a sign that the government’s stance regarding Petrobras is changing.”

Petrobras’s adjusted net income of 3.4 billion reais in the third quarter was less than the average estimate of 5.7 billion reais among analysts surveyed by Bloomberg.

Suzano, Romi

Suzano added 1.1 percent to 9.01 reais. The company reported earnings before interest, taxes, depreciation and amortization of 515 million reais, more than the average forecast of 389 million reais among eight analysts surveyed by Bloomberg.

Romi added 6.3 percent to 6.38 reais.

The Ibovespa 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 15 percent in dollar terms this year, compared with a decline of 1.9 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Trading volume of stocks in Sao Paulo today was 6.89 billion reais, according to data compiled by Bloomberg. That compares with a daily average of 7.61 billion reais this year through Oct. 22, according to data from the exchange.

Before it's here, it's on the Bloomberg Terminal.