Brazil's Stocks Advance as Commodities Gain Bolsters CSN, Valeby
State-owned oil producer Petrobras follows crude higher
Fibria is the worst performer on the gauge as the real climbs
The Ibovespa advanced for a third straight day as higher metal prices boosted the outlook for producers including mining company Vale SA.
Vale extended its three-day jump to 24 percent. Steelmaker Cia Siderurgica Nacional SA climbed to a three-month high. Lender Itau Unibanco Holding SA was among the stocks contributing the most to the index’s gain. Pulp and paper producer Fibria Celulose SA, which gets most of its revenue from exports, fell the most on the Ibovespa as the real strengthened.
Brazilian stocks erased earlier losses after Folha de S.Paulo reported the former head of builder OAS SA, one of the companies being investigated on corruption allegations in the so-called Carwash probe, is negotiating a plea bargain with prosecutors. That comes as bad news for the President Dilma Rousseff as it may involve further inquiries into alleged wrongdoings by her party, said Fernando Goes, an analyst at Clear Corretora brokerage.
“Recent gains in stocks are being driven, in part, by a better mood in global markets, but domestic politics is also playing a role,” Goes said in a phone interview from Sao Paulo. “The combination of these two factors is what’s driving such a strong rally.”
Negative news for Rousseff and her allies is pushing stocks higher on speculation that she could be closer to being impeached, Goes said. Investors are optimistic a new president could be more successful in pulling the country out of a recession that’s forecast to be the worst in 100 years.
The Ibovespa advanced 1.8 percent to 44,893.48 at the close of trading in Sao Paulo, extending a three-day surge to 7.9 percent. Vale gained 8.1 percent and CSN added 4.6 percent. Petroleo Brasileiro SA advanced 6.9 percent.