Bloomberg News

Bovespa Gains as China Manufacturing Outweighs Europe, U.S. Jobs

May 02, 2012

The Bovespa index rose for a second day as data that showed manufacturing picked up in China boosted the outlook for growth in Brazil’s top trading partner, outweighing employment in Europe and the U.S.

Petroleo Brasileiro SA contributed the most to the gauge’s advance after Valor Economico reported that the state-run oil producer may participate in a 5 billion-real ($2.6 billion) project to build a terminal in the city of Marica in the state of Rio de Janeiro. OGX Petroleo (OGXP3) & Gas Participacoes SA rose after its controller, the billionaire Eike Batista, said he’s considering the sale of another stake in his EBX Group Co.

The Bovespa climbed 0.5 percent to 62,111.11 at 2:07 p.m. in Sao Paulo. Forty stocks gained while 27 fell. The real weakened 0.8 percent to 1.9241 per U.S. dollar.

China’s Purchasing Managers’ Index rose to 53.3 in April from 53.1 in March, the statistics bureau and logistics federation said yesterday. It was the fifth straight reading above the 50 level dividing expansion from contraction.

“Markets in Brazil were closed yesterday for a national holiday, so only today investors are analyzing data that show manufacturing in China rose in April,” Joao Pedro Brugger, who helps oversee 70 million reais ($37 million) at Leme Investimentos, said by phone from Rio de Janeiro. “It’s more important for Brazil that China recovers than the euro region or even the U.S.”

Employment Reports

The jobless rate in the 17-nation euro area increased to 10.9 percent in March from 10.8 percent in February, the European Union statistics office in Luxembourg said today. That’s the highest since April 1997, according to data compiled by Bloomberg. U.S. employers added 119,000 workers in April, according to figures from Roseland, New Jersey-based ADP Employer Services. The median forecast of economists surveyed by Bloomberg News called for a 170,000 advance.

Petrobras advanced 2.7 percent to 21.87 reais. OGX gained 3.7 percent to 13.72 reais.

Batista said he’s considering partnering with an industrial group to help develop iron-ore, oil, coal and gold resources that he estimates may be worth about $1.5 trillion. The sale of another stake in EBX would help boost global investors’ confidence in these projects, the billionaire said April 30 in an interview on Bloomberg Television’s “Money Moves.”

Banks Fall

Banco do Brasil SA, Latin America’s biggest bank by assets, dropped 1.2 percent to 23.29 reais, the most in a week. It was the worst performer on the MSCI Brazil/Financials Index, which slipped 0.9 percent. Itau Unibanco SA (ITUB:US) lost 0.7 percent to 29.79 reais.

President Dilma Rousseff said in a televised address on April 30 that the economy will only be competitive when interest rates for producers and consumers are at global-market levels.

Brazil’s benchmark equity measure has gained 9.5 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 sovereign-debt crisis. The gauge has fallen 9 percent since this year’s high on March 13 as signs of a slowdown in China spurred speculation that demand for commodities exports may falter.

The Bovespa trades at 10.4 times analysts’ earnings estimates, in line with the 10.6 ratio for MSCI Inc.’s measure of 21 developing nations’ equities, data compiled by Bloomberg show.

Trading volume was 4.86 billion reais in stocks in Sao Paulo on April 30, data compiled by Bloomberg show. That compares with a daily average of 7.23 billion reais this year through April 27, according to data from the exchange.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

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


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