Ibovespa Advances After Election Poll as Metals Gain Buoys ValeDenyse Godoy
The Ibovespa climbed as a drop in Brazil’s jobless rate improved the outlook for consumer stocks, while mining companies and steelmakers followed metals higher.
Centrais Eletricas Brasileiras SA rose for the first time in four days as an election poll showed increased support for Brazilian opposition candidates, raising the prospect of a new government that will reduce intervention in state-run companies. Iron-ore miner Vale SA climbed a second day. JBS SA, the world’s biggest meat producer, rose the most on the MSCI Brazil/Consumer Staples Index.
The Ibovespa added 1.2 percent to 52,806.22 today in Sao Paulo, snapping a three-day decline. The real weakened 0.3 percent to 2.2148 per dollar at 5:19 p.m. local time. The Bloomberg Base Metals Spot Price Commodity Index rose 1.6 percent.
Brazilian stocks rallied “on the good news of the decline in the unemployment rate and the increase in commodity prices,” Luis Gustavo Pereira, a strategist at the brokerage firm Guide Investimentos, said in a phone interview from Sao Paulo. “Expectations regarding the elections have boosted state-run companies recently.”
The Ibovespa entered a bull market on May 7, surging 20 percent from this year’s low on March 14, as state-run companies rallied on polls showing falling support for President Dilma Rousseff before the October elections.
Rousseff’s support grew to 40 percent this month from 37 percent in April in a poll that pitted her against potential candidates including Senator Aecio Neves and former Governor Eduardo Campos, whose backing increased by more than that of the incumbent, according to the survey conducted by public opinion research company Ibope. The May 15 to 19 poll of 2,002 people has a margin of error of 2 percentage points.
Neves of the Brazilian Social Democracy Party had 20 percent support, up from 14 percent last month, and Campos trailed in third place with 11 percent, an increase from 6 percent in April, according to the poll published today on Globo news service’s G1 website.
Preferred shares of Eletrobras, as Centrais Eletricas is known, rose 3.3 percent to 9.94 reais, in its biggest one-day gain since April 29. Vale climbed 1.7 percent to 26.62 reais. JBS advanced 2.5 percent to 7.84 reais.
Brazil’s unemployment rate fell to 4.9 percent in April from 5 percent in the previous month, the national statistics bureau reported today. The median forecast of economists surveyed by Bloomberg was 5.2 percent.
Metals prices rose on a bigger-than-estimated improvement in manufacturing industries and increasing signs of policy measures to support the economy of China, Brazil’s most important trading partner. Commodity producers account for about one-third of the Ibovespa’s weighting.
Trading volume of stocks in Sao Paulo was 5.85 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 6.73 billion reais this year, according to data from the exchange.