Bloomberg News

Bovespa-Index Futures Advance as Higher Commodities Boost Vale

June 06, 2012

Bovespa (IBOV) futures rose, a sign the stock gauge may climb from an eight-month low, as speculation policy makers in Europe may act to shore up growth lifted commodities, boosting the outlook for Brazil’s biggest companies.

Iron-ore producer Vale SA (VALE:US), the heaviest-weighted stock on the measure, advanced in early U.S. trading, following metals higher. Banco Cruzeiro do Sul SA, the bank that was seized by Brazil’s central bank after it found “serious” financial violations, said its shares will resume trading today. Cia. Brasileira de Distribuicao Grupo Pao de Acucar, Brazil’s biggest retailer, may move after it named a new chief financial officer.

Bovespa futures rose 0.9 percent to 53,985 at 9:13 a.m. in Sao Paulo. The real strengthened 0.3 percent to 2.0167 per U.S. dollar.

The European Central Bank today kept the benchmark interest rate at a record low of 1 percent, as predicted by 49 of 60 economists surveyed by Bloomberg. With European governments struggling to fix a crisis that’s engulfing Spain and could force Greece out of the euro, speculation mounted that the ECB may soon be forced to lower rates and introduce more liquidity support for banks.

“We expect a day of gains for the Bovespa,” Banco Bradesco SA’s economic team wrote in a note to clients. “What’s boosting the markets is the expectation that, despite keeping the lending rate unchanged, the president of the European Central Bank, Mario Draghi, will signal further monetary easing in Europe.”

G-7 Response

The Group of Seven nations yesterday agreed to coordinate their response to Europe’s turmoil, which has tipped at least eight of the 17 euro-area economies into recession and damped European demand for foreign goods.

The Bovespa entered a bear market on May 17 after tumbling 21 percent from this year’s high on March 13 through that day. The gauge has since extended that drop to 23 percent and trades at 9 times analysts’ earnings estimates for the next four quarters, which compares with the 9.7 ratio for MSCI Inc.’s measure of 21 developing nations’ equities, data compiled by Bloomberg show.

Trading volume was 5 billion reais ($2.5 billion) in stocks in Sao Paulo yesterday, which compares with a daily average of 7.2 billion reais this year through June 4, according to data from the exchange.

To contact the reporter on this story: Ney Hayashi in Sao Paulo at

To contact the editor responsible for this story: David Papadopoulos in New York at

The Good Business Issue

Companies Mentioned

  • VALE
    (Vale SA)
    • $8.16 USD
    • 0.07
    • 0.86%
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