Brazil's Stocks Lead World Gains as China Stimulus Buoys Vale

  • Commodity exporters rise on measures to support Asian country
  • Oil producer Petrobras rallies after loan from China bank

The Ibovespa led world gains as measures to support the economy in China, Brazil’s top trading partner, bolstered the outlook for raw-materials exporters.

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Iron-ore miner Vale SA was the best performer on a gauge of commodity producers. Petroleo Brasileiro SA, the state-controlled oil company known as Petrobras, rallied after getting a $10 billion loan from China Development Bank. Clothing retailer Lojas Renner SA rose the most in a month as economists forecast the monetary authority will lower its benchmark interest rate further, benefiting companies that depend on domestic demand.

Brazilian shares extended their best monthly rally since April as China’s central bank stepped up efforts to cushion its economic slowdown by cutting the amount of cash the nation’s lenders must lock away. Concern that the world’s second-biggest economy was headed for a hard landing contributed to the worst start of the year for the Ibovespa since 2008.

"Today’s measure helps to reduce the market’s anxiety regarding China’s growth prospects," Pablo Spyer, operational director at Mirae Asset Wealth Management, said from Sao Paulo. "And that’s especially good for Brazil."

The Ibovespa added 2.9 percent to 42,793.86 at the close of trading in Sao Paulo as all but two of its 61 stocks gained. Its price-to-book ratio, or assets after subtracting liabilities, was near 1 -- about half the valuation of global stocks.

The MSCI Brazil Materials Index climbed 4.8 percent. Vale and Petrobras added more than 5.9 percent.

Renner gained 3.7 percent. Analysts covering Brazil forecast the central bank will reduce its benchmark Selic to 12.5 percent by year-end 2017 from the current level of 14.25 percent, which is down from last week’s median estimate of 12.63 percent. Policy makers will meet to decide on the rate on March 1-2. Swap rates on the contract maturing in January 2017, a gauge of expectations for Brazil’s interest rates, fell 0.045 percentage point to to 14.18 percent.

Air carrier Gol Linhas Aereas Inteligentes SA climbed 6.5 percent, extending this month’s advance to 51 percent. Smiles SA, a frequent-flyer program provider, agreed to buy as much as 1 billion reais ($249 million) of tickets in advance from Gol, its biggest shareholder.

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