Ibovespa Advances on Wagers Brazil Closer to Government Change

  • Itau, Bradesco contribute the most to the index's gain
  • Commodity producers are worst performers among 10 groups

The Ibovespa halted a four-day slide after Brazil’s top prosecutor asked the Supreme Court to authorize an investigation into President Dilma Rousseff, adding to speculation that the country is getting closer to a change in government.

Lenders Itau Unibanco Holding SA and Banco Bradesco SA contributed the most to the gauge’s rally. Logistics company Rumo Logistica Operadora Multimodal SA jumped to the highest in four months after Bradesco BBI resumed coverage with a buy rating. Vale SA slumped after Brazil moved to fine the mining company over an environmental disaster.

Traders have pushed up the value of Brazilian shares this year on speculation that Rousseff’s impeachment would pave the way for an administration that is more successful in regaining investors’ confidence and revive the economy. Vice-President Michel Temer, who’d take power in case she’s ousted, intends to get approval for investor-friendly measures such as lifting caps for foreign investments in some industries, according to an aide with direct knowledge of the issue who asked not to be named.

“We still haven’t seen all of the rally that an impeachment will bring,” said Joao Pedro Brugger, a money manager at Leme Investimentos. “I think the Ibovespa can get close to 60,000 after all the process is over. Until then, we’ll probably see high volatility in the market. But the most-likely scenario is still Dilma’s exit.”

The Ibovespa rose 0.6 percent to 52,552.80 Wednesday in Sao Paulo after losing as much as 0.6 percent earlier. Vale retreated 5.3 percent. Air carrier Gol Linhas Aereas Inteligentes SA rallied as much as 32 percent after receiving some debt relief from investor Delta Air Lines Inc. while it looks to extend the maturity of 1.05 billion reais in local bonds.

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