Ibovespa Advances as Santander Leads Rally in Financial Stocks

The Ibovespa rose amid speculation that better-than-forecast earnings for Banco Santander Brasil SA is a sign that lenders are weathering the economic slump.

Itau Unibanco Holding SA and Banco Bradesco SA contributed the most to the index’s advance. Iron-ore producer Vale SA slid for a second straight day.

The Ibovespa added 0.5 percent to 55,812.03 at the close of trading in Sao Paulo. Santander Brasil jumped 5.4 percent to 16 reais, leading gains among banks, as adjusted net income of 1.6 billion reais ($547 million) in the first quarter beat analysts’ estimates.

“Investors are reading Santander’s results as a sign that banks in Brazil are managing to sustain their profitability even in a difficult economic scenario,” Joao Pedro Brugger, who helps oversee 500 million reais as a money manager at Leme Investimentos, said by telephone from Florianopolis, Brazil.

Itau increased 1 percent to 38.79 reais, and Bradesco added 1.5 percent to 32.45 reais.

The Ibovespa fell 1 percent earlier after a report showed an increase in Brazil’s unemployment rate in March to 6.2 percent. Real-estate developer Gafisa SA slumped 3.7 percent to 2.58 reais on speculation a shortage of jobs will crimp demand for homes. Vale retreated 0.4 percent to 18.55 reais.

The stock benchmark entered a bull market April 24 after rising more than 20 percent from a Jan. 30 low. Trading volume of equities in Sao Paulo was 8.52 billion reais on Tuesday, according to data compiled by Bloomberg. That compares with a daily average of 6.89 billion reais this year, according to the exchange.

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