Ibovespa Snaps Three-Day Decline as Vale Rises With Commodities

The Ibovespa snapped a three-day drop as iron-ore producer Vale SA followed commodities prices higher after an interest-rate increase in India bolstered confidence in the outlook for emerging markets.

Vale contributed the most to the gauge’s advance. Brewer AmBev SA rebounded from the lowest since July. Card-payment processor Cielo SA climbed before the release of its quarterly earnings report. Minerva SA led meatpackers lower after the city of Belo Horizonte, Brazil, said it is investigating a possible case of mad cow disease. Dental benefits provider Odontoprev SA rose as Grupo BTG Pactual recommended buying the stock.

The Ibovespa added 0.3 percent to 47,840.93 at the close of trading in Sao Paulo with 42 of its 72 member stocks higher. The Standard & Poor’s GSCI index of 24 raw materials climbed 0.9 percent at 2:28 p.m. in New York. The real lost 0.1 percent to 2.4240 per dollar. Most emerging-market currencies rose after the Reserve Bank of India unexpectedly increased the repurchase rate to 8 percent from 7.75 percent to bolster the rupee.

“There has been a lot of concern about the emerging-market economies as the Federal Reserve is expected to cut stimulus measures as China’s growth slows down,” Alvaro Bandeira, a partner at Orama Asset Management, said by phone from Rio de Janeiro. “When central banks take action, investors get more confident.”

The MSCI Emerging Markets Index dropped the most in six months yesterday, to the lowest since August, on concern that the Federal Reserve’s expected reduction in U.S. stimulus will squelch demand for assets from developing nations. In China, the economy will probably expand this year at the slowest pace since 1990, based on the median estimate in a Bloomberg News survey.

JBS, Minerva

Vale advanced 1.2 percent to 28.88 reais. AmBev gained 0.4 percent to 16.10 reais. Odontoprev added 0.2 percent to 8.73 reais.

Minerva dropped 2.1 percent to 10.92 reais, while JBS SA declined 0.8 percent to 8.35 reais. Belo Horizonte is investigating a hospital’s report of a suspicious death that could be related to mad cow disease, the city’s health secretary said in an e-mail. Last year, four suspected cases there were dismissed after being probed, according to the secretary.

Cielo rose 0.2 percent to 63.11 reais. Fourth-quarter adjusted net income rose 21 percent to 732.9 million reais, according to the average estimate of seven analysts surveyed by Bloomberg. The company is scheduled to release the results after the close of trading.

Trading Volume

Utility Rede Empresas de Energia Eletrica SA jumped 8.1 percent to 1.07 reais. The acquisition of the company’s units by Energisa SA was approved, Brazil electricity regulator head Romeu Rufino said today in Brasilia. The full operation is still pending approval from BNDESPar and from a U.S. judge for negotiation with Grupo Rede bondholders, Energisa said in the statement.

The Ibovespa has tumbled 15 percent from a bull-market high on Oct. 22 as inflation exceeded policy makers’ target for a third consecutive year and concern mounted that higher government spending will lead to a reduction in the country’s credit rating.

Trading volume of stocks in Sao Paulo was 5.32 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 6.24 billion reais this month, according to data from the exchange.

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