Brazil’s Stocks Advance as Brexit Outlook Favors Riskier Assets

  • Tension in markets fell after U.K. referendum campaign halted
  • State-controlled Petrobras contributed most to Ibovespa gains

The Ibovespa rose for a third straight day as investor appetite for riskier assets climbed amid speculation the odds of the U.K. leaving the European Union are diminishing.

State-controlled oil producer Petroleo Brasileiro SA contributed the most to the benchmark gauge’s gains, while steelmaker Usinas Siderurgicas de Minas Gerais SA rallied. Commodity shares account for 21 percent of the index’s weighting. Crude and metals rose, triggering gains for stocks from China to London, as campaigning in Britain’s referendum was suspended for a second day following the murder of a lawmaker.

With valuations close to the lowest level since February, Brazilian stocks attracted investors betting on the recovery in Latin America’s biggest economy from its worst recession in a century. As the uncertainty regarding global growth diminishes, the attention turns back to Acting President Michel Temer’s plan to shore up the budget.

"The market is relieved today," Raphael Figueredo, an analyst at the brokerage Clear Corretora, said from Sao Paulo. "That paves the way for bargain-hunting in Brazil, based on the hope the country will be able to rebound."

The Ibovespa added 0.3 percent to 49,533.84 in Sao Paulo as 27 of its 59 stocks advanced. Petrobras and Usiminas rose at least 2.4 percent. The MSCI Brazil energy index rose the most among 10 industry groups. Oil producer QGEP Participacoes SA had its biggest advance on record.

Pulp producers Suzano Papel e Celulose SA and Fibria Celulose SA posted the biggest declines in the Ibovespa as a rally in the real dimmed the outlook for exports.

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