Brazil Stocks Gain, Following European Indexes as Oil Rebounds

  • Banco do Brasil says bad loans provisions likely to retreat
  • Petrobras among biggest contributors to Ibovespa advance

Brazilian stocks advanced after Banco do Brasil SA said provisions for bad loans would fall in the second half of the year and as a rebound in oil boosted state-owned crude producer Petroleo Brasileiro SA. 

The Ibovespa gained 2.4 percent to 58,299.57 on Thursday in Sao Paulo, the highest level since September 2014. Petrobras, as the state oil company is known, was among the biggest contributors to the increase as it climbed 4.7 percent. Banco do Brasil posted the index’s biggest gains as the lender’s chief financial officer said delinquency rates and provisions for defaults were poised to decline. The lender showed “improvement in terms of quality and that is what we believe the market should be looking at today,” Banco Safra SA analyst Francisco Kops wrote in a note.

Brazil’s equities joined a rally in European and U.S. stocks as oil climbed after two days of losses and companies from Macy’s Inc. to Zurich Insurance Group AG posted better-than-forecast results. In Brazil, the 40 Ibovespa members that have reported second-quarter earnings trailed analysts’ forecasts by an average 3.1 percent amid the country’s worst recession in more than a century. The stock index is the world’s best performer this year in dollar terms on optimism a new government will put an end to the economic slump.

"Without major macroeconomic domestic drivers, stocks are mostly following external indexes," said Juliano Ferreira, a strategist at Icap do Brasil CTVM in Sao Paulo.

Marfrig Global Foods SA posted one of the biggest declines on Ibovespa, falling 0.7 percent after its second-quarter loss widened to 131.9 million reais ($42 million) amid lower cattle availability and a drop in beef prices.

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