Ibovespa Futures Fluctuate as Gain in February Deemed Excessive

Ibovespa futures fluctuated on speculation the benchmark stock index’s rally this month will be hard to sustain given doubts regarding how long the government’s fiscal measures will take to start bolstering growth.

Raw-materials producers including steelmaker Gerdau SA may move as metal prices dropped. Frozen-dinners producer BRF SA may be active after fourth-quarter profit exceeded analysts’ estimates by 20 percent. State-controlled oil producer Petroleo Brasileiro SA may move as a gain in crude improved the outlook for its offshore investments.

Ibovespa futures contracts due in April were little changed at 52,480 at 9:59 a.m. in Sao Paulo. The Ibovespa has risen 10 percent in February.

“Investors are pretty optimistic with the fiscal adjustment measures, but that’s a long-term view,” Rafael Ohmachi, analyst at brokerage firm SLW Corretora, said in phone interview from Sao Paulo. “We don’t exactly know when we’ll starting seeing the effects. And the Brazilian economy right now is pretty weak.”

Finance Minister Joaquim Levy announced Jan. 19 increased taxes on fuel, imports, credit and cosmetics as part of efforts to restore confidence in Brazil’s fiscal management.

Analysts forecast a 0.5 percent contraction in Brazil’s gross domestic product this year, according to the median of estimates in a weekly central bank survey of about 100 economists published Monday. They saw a decrease of 0.42 percent in the prior week.

The Ibovespa 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 5.8 billion reais ($2 billion) Thursday, according to the exchange. That compares with a daily average of 6.7 billion reais this year.

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