Ibovespa Joins Emerging Markets Gains on U.S. Rate Speculation

  • Riskier markets would be favored by delay in Fed rate increase
  • Miner Vale leads commodity producers advance as materials rise

Brazil’s benchmark stock index rose, extending a weekly advance, after a sharp increase in metals prices buoyed commodity producers amid speculation the U.S. may not raise rates as soon as expected.

Miner Vale SA climbed to a two-week high as iron ore advanced the most in a month. Brazilian stocks joined gains in other emerging countries after slower hiring in the world’s biggest economy led traders to reduce bets that Federal Reserve policy makers would increase interest rates at its June meeting.

"The possibility of a rate increase was making investors in emerging markets tense, so that’s a relief," said Vitor Suzaki, an analyst at brokerage Lerosa Investimentos.

Markets on Wednesday were pricing in a 22 percent probability of a June rate hike. That fell to 4 percent on Friday.

The Ibovespa added 1.1 percent to 50,415.39 at 10:31 a.m. in Sao Paulo, extending its weekly advance to 2.8 percent. Vale added 3.1 percent.

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