Brazil Stocks Rise With Petrobras Before Interest-Rate Decision

  • State-owned oil producer contributes most to Ibovespa’s gain
  • Homebuilder Gafisa advances on increase of new projects

Brazil’s Ibovespa rose for a fifth consecutive day, buoyed by state-controlled oil producer Petroleo Brasileiro SA, as investors bet that the central bank will start reducing the highest borrowing costs in the G-20 on Wednesday.

Petrobras, as Petroleo Brasileiro is known, contributed the most to the benchmark equity index’s advance after crude gained on lower U.S. stockpiles. Steelmaker Usinas Siderurgicas de Minas Gerais SA was one of the best performers on the index as investment bank Banco Itau BBA SA withdrew a sell recommendation on the stock. Homebuilder Gafisa SA rose to the highest since April after reporting a 21 percent increase in new projects in the third quarter.

Lower interest rates could be a boon to an economy stuck in its worst recession in a century. Brazilian stocks have gained 83 percent in dollar terms this year, the best performance in the world, on optimism that President Michel Temer’s administration will succeed in trimming a budget deficit and restoring investors’ confidence. As the recovery plan is put in place, the recent rebound in shares of Petrobras and other commodity producers is also helping drive gains in the Ibovespa.

"The expectation of better days in Brazil has taken over the market," Ari Santos, equity trading manager at the brokerage H. Commcor, said from Sao Paulo.

The Ibovespa added 0.3 percent to 63,965.73, its highest level since April 2012, as of 11:01 a.m. in Sao Paulo. More than two-thirds of its 58 stocks advanced. Petrobras gained 1.7 percent, while the steelmaker known as Usiminas added 2.5 percent. Gafisa climbed 5.5 percent.

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