Bloomberg News

Bovespa Stock Index Rebounds From Month-Low on Commodity Gains

December 14, 2011

Dec. 13 (Bloomberg) -- The Bovespa stock index rebounded from the lowest this month as higher commodity prices outweighed a report that showed Brazilian retail sales stalled.

Beef exporters JBS SA and Marfrig Alimentos SA led gains on the index. Fibria Celulose SA, the world’s largest pulp producer, rose for the second time in three days. Advances were partially offset by declines in consumer-goods maker Hypermarcas SA and airline Gol Linhas Aereas Inteligentes SA.

The Bovespa rose 0.3 percent to 57,494.85 at the close in Sao Paulo. Forty-six stocks climbed on the index while 17 fell. The real weakened 1.1 percent to 1.8638 per dollar.

“The stock market here will continue to follow news abroad,” said Gustavo Mendonca, who helps oversee 171 million reais ($91.7 million) as an economist at Oren Investimentos in Rio de Janeiro. Brazilian retail sales “were weak, but that was expected. It confirms the slowdown trend.”

The measure pared a gain of as much as 1.4 percent earlier, tracking U.S. stocks lower, after the Federal Reserve refrained from taking additional actions to stimulate the economy. The Standard & Poor’s GSCI index of 24 raw materials increased 1.3 percent.

JBS SA, the world’s biggest beef producer, rose 3.1 percent to 5.67 reais while Marfrig, Latin America’s second-largest beef producer, increased 2.9 percent to 8.85 reais. Fibria gained 1.8 percent to 13.69 reais. Hypermarcas fell 2.2 percent to 8.35 reais as Gol slid 1.8 percent to 15.07 reais.

Retail Sales

Brazil’s retail sales unexpectedly stalled in October from the previous month as clothing and pharmaceutical sales sank, the national statistics agency said today in Rio de Janeiro. Economists had forecast a monthly increase of 0.2 percent, according to the median estimate from 35 analysts surveyed by Bloomberg. Sales rose 4.3 percent from a year earlier.

Brazil’s benchmark equity gauge entered a bull market in October after gaining 22 percent from a two-year low on Aug. 8 as interest-rate cuts in Brazil and signs of progress in solving Europe’s debt crisis buoyed demand for equities. The measure is still down 17 percent this year on concern flagging global commodity demand and quickening inflation will hurt corporate earnings growth.

The index slumped yesterday as commodities fell after Moody’s Investors Service said it will review European ratings and as concern mounted that Brazil’s economy may falter.

The Bovespa trades at 10.3 times analysts’ earnings estimates, more expensive than the ratio of 10.1 for MSCI Inc.’s measure of 21 developing nations’ equities, weekly data compiled by Bloomberg show.

Traders moved 5.99 billion reais in stocks in Sao Paulo today, data compiled by Bloomberg show. That compares with a daily average this year of 6.52 billion reais through Dec. 1, according to data from the exchange.

--Editors: Richard Richtmyer, Brendan Walsh

To contact the reporter on this story: Alexander Cuadros in Sao Paulo at acuadros@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos in New York at papadopoulos@bloomberg.net


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