Ibovespa Rallies to Nine-Month High as Parties Abandon Rousseff

  • State-controlled Petrobras rises on government change bets
  • Brazil stocks join global gains after Chinese trade data

Brazil Braces for Impeachment of Dilma Rousseff

Brazil’s Ibovespa equity index rallied to a nine-month high as traders increased wagers that President Dilma Rousseff will be impeached, paving the way for a new government to pull the economy out of its worst recession in a century.

State-controlled oil producer Petroleo Brasileiro SA contributed the most to the gauge’s advance advance after PP, Brazil’s fourth-biggest political party by number of lawmakers, and a smaller party known as PRB decided to abandon the ruling coalition. That decreases the chances Rousseff will prevail when the lower house votes April 17 on whether to continue the impeachment process.

"The desertion of parties is a very clear signal that the government is coming to an end," Jason Vieira, the chief economist at Infinity Asset Management in Sao Paulo, who got his first job as an assistant trader at Brazil’s exchange in 1992, the year Fernando Collor de Mello stepped down rather than face impeachment. "That hope has been the main driver for Brazil’s stocks recently. Every piece of news helps to adjust the expectations."

The Ibovespa gained 2.2 percent to 53,149.84, the highest since July 14, at the close of trading in Sao Paulo as all except six of its 61 stocks rose. Petrobras, as Petroleo Brasileiro is known, advanced 5.3 percent. State-owned lender Banco do Brasil climbed 1 percent, extending a five-day advance, and Latin America’s biggest private-sector bank Itau Unibanco Holding SA rose 1.2 percent.

An MSCI index of material producers gained the most among 10 industry groups after trade data from China fueled optimism on growth in Brazil’s largest trading partner. Miner Vale SA, whose main export destiny is the Asian country, added 4.2 percent. Steelmakers Cia. Siderurgica Nacional SA, Usinas Siderurgicas de Minas Gerais SA and Metalurgica Gerdau SA gained at least 8.4 percent.

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