Brazilian stocks rose for the first time in three days as a better-than-expected auction of Spanish debt and improving German investor confidence allayed European debt concerns and lifted commodity prices.
Mining company MMX Mineracao & Metalicos SA was the best performer on the MSCI/Brazil Materials index, while competitor Vale SA (VALE3) contributed the most to the benchmark Bovespa index’s advance, following metals higher. Airline Gol Linhas Aereas Inteligentes SA rallied on speculation Brazil may cut taxes to help the industry.
The Bovespa added 1.5 percent to 62,877.13 at 3:38 p.m. in Sao Paulo. Fifty-four stocks gained on the measure while 11 dropped. The real slid 0.2 percent to 1.8505 per U.S. dollar. The Standard & Poor’s GSCI index of 24 raw materials rose 0.5 percent.
“Positive news coming from Spain and Germany signal that developed countries may be recovering slowly, but in a consistent way,” Felipe Casotti, who helps manage 1.2 billion reais ($648.5 million) at Maxima Asset Management, said by phone from Rio de Janeiro. “Concern about the slowndown in the global economy was the main reason to push equities lower in the past few weeks, and today’s news brought some relief to the markets.”
In Germany, a report from the ZEW Center for European Economic Research showed investor confidence unexpectedly rose for a fifth month in April, reaching the highest in almost two years. Spain sold 3.18 billion euros ($4.18 billion) of bills today, compared with a maximum target of 3 billion euros the Treasury had set for the sale.
MMX climbed 4 percent to 9.08 reais. Vale, the world’s largest iron-ore producer, rose 2.4 percent to 42.21 reais.
Brookfield Incorporacoes SA, Brazil’s fifth-largest real- estate company by revenue, rose 1.6 percent to 5.59 reais after saying contracted sales increased 25 percent to 795 million reais in the first-quarter, according to a regulatory filing yesterday. Smaller competitor Even Construtora e Incorporadora SA gained 4.7 percent to 7.54 reais after it said in a statement that 10 projects worth 516 million reais were started in the first quarter. The BM&FBovespa Real Estate Index (IMOBBV) headed to a one-week high.
Gol, Brazil’s second-biggest airline by market value, jumped 9.5 percent to 11.22 reais, the biggest one-day gain in two months. Brazil’s government may cut the payroll and aircraft fuel taxes to boost airlines’ competitiveness, Sao Paulo-based newspaper Valor Economico reported, without saying where it got the information. The Finance Ministry declined to comment on Valor’s report in an e-mailed statement.
Voting shares of Centrais Eletricas Brasileiras SA, Latin America’s largest publicly traded utility, jumped 7.5 percent to 16.82 reais. The state-controlled company said its net income rose 66 percent to 3.73 billion reais in 2011. Eletrobras, as the utility is known, said it intends to pay 50 percent of its 2011 profit in dividends.
Eletrobras was scheduled to release its complete 2011 financial statements yesterday and postponed the announcement to today after markets close.
Localiza Rent a Car SA, Latin America’s biggest car-rental company, rose 4.4 percent to 33.20 reais after reporting first- quarter net income rose 14 percent to 72.7 million reais, beating the average estimate of seven analysts surveyed by Bloomberg.
Brazil’s benchmark equity measure has gained 11 percent this year, buoyed by local interest-rate cuts, signs of expansion in the U.S. and speculation Europe may be closer to resolving its debt crisis. The gauge trades at 10.3 times analysts’ earnings estimates, which compares with a 10.4 ratio for MSCI Inc.’s measure of 21 developing nations’ equities, weekly data compiled by Bloomberg show.
Traders moved 6.14 billion reais in stocks in Sao Paulo yesterday, data compiled by Bloomberg show. That compares with a daily average of 7.11 billion reais this year through April 12, according to data from the exchange.
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