Ibovespa Rises as Gain in Commodities Buoys Brazilian Producers

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The Ibovespa climbed for a second straight day as an increase in the prices of crude oil and industrial metals buoyed prospects for Brazil’s raw-material producers.

State-run oil company Petroleo Brasileiro SA surged after a report that Chief Executive Officer Maria das Gracas Foster is being replaced, helping make energy and materials shares the best performers among 10 industry groups in the MSCI Brazil Index. Itau Unibanco Holding SA, Latin America’s biggest bank by market value, rallied after earnings topped estimates.

The Ibovespa climbed 2.8 percent to 48,963.66 at the close of trading in Sao Paulo, extending a two-day advance to 4.4 percent. The Standard & Poor’s GSCI index of 24 raw materials gained 4.2 percent amid speculation that officials in China will act to boost economic growth, supporting demand for commodities.

“You see an external outlook a bit more positive, with commodities rising after falling to really low levels, so that’s something that can boost the Ibovespa in the short term,” Alvaro Bandeira, who helps oversee 240 million reais ($89 million) as a partner at Orama Asset Management, said by phone from Rio de Janeiro.

Metals advanced after a survey from HSBC Holdings Plc and Markit Economics showed their manufacturing index for China dropped in January, spurring speculation that the government will ease monetary policy. Oil rose for a fourth straight day in its longest winning streak since August.

Vale’s Rally

Iron-ore producer Vale SA, whose biggest export market is China, added 4.8 percent to 18.05 reais.

Petrobras, as Petroleo Brasileiro is known, rose 15 percent to 10 reais, the biggest one-day rally since 1998. Foster was informed by President Dilma Rousseff’s office that the government is seeking candidates for her position, newspaper Folha de S.Paulo reported, without saying how it got the information.

Rousseff’s press office denied that Rousseff is looking for executives to replace Foster. Rousseff and Foster are meeting today, a presidential press officer told reporters in Brasilia, without saying why.

Itau gained 2.8 percent to 34.25 reais after posting fourth-quarter adjusted net income of 5.66 billion reais, topping the average estimate of 5.37 billion reais among analysts surveyed by Bloomberg. Homebuilder Gafisa SA climbed 4.7 percent to 2 reais after saying it plans to buy back as many as 27 million shares over the next year.

Brazil’s stock benchmark entered a bear market Dec. 12 after falling 22 percent from last year’s high in September. Trading volume of equities in Sao Paulo was 7.99 billion reais Tuesday, according to data compiled by Bloomberg. That compares with a daily average of 6.35 billion reais in January, according to the exchange.