Brazilian Stocks Advance as Vale, CSN Gain on Iron Ore Prices

  • Gerdau leads exporters gain, rises to eight-month high
  • Surprise jump in Chinese manufacturing gauge buoys iron ore

Brazil’s stocks extended a weekly gain as an advance in the price of iron ore buoyed Vale SA, the world’s biggest miner of the raw material, as well as steelmakers like Gerdau SA, which produces some of its supplies.

Materials producers were the third-best performers among 10 industry groups. Drugstore chain Brasil Pharma SA gained after government regulators authorized a 12.5 percent increase in medicine prices this year. Bradespar SA, which is part of Vale’s controlling group, jumped to a four-month high.

Iron ore gained after data showed a better outlook for manufacturing in China, suggesting that fiscal and monetary stimulus is taking effect in the nation that’s Brazil’s biggest trading partner. The Ibovespa gained 17 percent in March amid rising speculation that President Dilma Rousseff will fail in her bid to avoid impeachment. Alvaro Bandeira, chief economist at the brokerage Modalmais, expects politics to drive swings in stocks.

"Punctual good news for some Brazilian companies can fuel limited moves on the exchange," he said from Rio de Janeiro. "But that’s not a trend, we should expect more volatility on the way."

The Ibovespa added 1 percent to 50,561.53 at the close of trading in Sao Paulo as 47 of its 61 stocks advanced. Gerdau climbed 7.4 percent, and Vale added 4.3 percent, with Bradespar gaining 6 percent. Brasil Pharma rose 1.1 percent.

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