Ibovespa Rises as Recovery Optimism Outweighs Commodity Decline

  • Index remains world’s best performer this year in dollar terms
  • Retailers gain on consumer confidence, inflation data

The Ibovespa rose for the first time in three days as companies that depend on domestic demand got a boost from a report showing Brazil’s consumer confidence is rising, offsetting a drop in commodity producers.

Retailer Lojas Renner SA was the best performer on the MSCI Brazil Consumer Discretionary Index, which gained the most among 11 industry groups as the Getulio Vargas Foundation reported that seasonally adjusted consumer confidence climbed to the highest since January 2015. Bets on lower interest rates after the central bank said inflation would meet its target next year for the first time since 2009 also buoyed for-profit college managers Kroton Educacional SA and Estacio Participacoes SA. State-controlled oil producer Petroleo Brasileiro SA slumped with crude prices as Iran said it’s unwilling to freeze output at current levels.

Brazil’s stocks have gained 65 percent this year in dollar terms, the best performance among major global benchmarks, on wagers that a new government will be able to pull the country out of recession and shore up its budget. The data released Tuesday reinforced optimism that the recovery of Latin America’s biggest economy has already started.

"Those positive signals are encouraging to investors," Paulo Figueiredo, an economist at FN Capital, said from Petropolis, Brazil. "They’re showing the country is moving in the right direction."

The benchmark equity index added 0.6 percent to 58,382.49 at the close of trading in Sao Paulo as 35 of its 58 stocks rose. Renner climbed 1.5 percent, and Lojas Americanas SA gained 0.5 percent. Kroton advanced 1.7 percent and Estacio rose 2.7 percent. Petrobras, as Petroleo Brasileiro is known, dropped 2.1 percent.

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