The Bovespa (IBOV) index advanced for a fourth day as raw-materials producers gained amid speculation central bankers in China and Europe will ease monetary policy, helping shore up global growth.
Steelmakers Usinas Siderurgicas de Minas Gerais SA and Cia. Siderurgica Nacional SA helped lead gains on the benchmark index. Eletropaulo Metropolitana SA, the Brazilian unit of AES Corp. (AES:US), rebounded after plunging 10 percent yesterday.
The Bovespa climbed 0.5 percent to 56,076.82 at the close in Sao Paulo. Forty-three stocks gained on the gauge while 17 declined. The real weakened 0.6 percent to 2.0279 per U.S. dollar.
The European Central Bank will cut interest rates tomorrow, according to a Bloomberg survey of economists. In China, a state-run newspaper said yesterday policy makers may lower lenders’ reserve requirements three more times this year.
“Investors are waiting for more stimulus measures in Europe, and maybe China, and that’s boosting stocks,” Joao Pedro Brugger, a portfolio manager at Leme Investimentos in Florianopolis, Brazil, said in a phone interview. “It may give some short-term relief to the markets, but uncertainties will remain. There were tons of stimulus in the past few years, which didn’t avoid the slowdown we’re seeing now.”
Usiminas, as Usinas Siderurgicas is known, advanced 3.2 percent to 6.99 reais, the highest in two weeks. CSN rose 3.1 percent to 12.44 reais.
OGX Petroleo & Gas Participacoes SA, the oil company controlled by billionaire Eike Batista, climbed 3 percent to 6.28 reais. OGX plunged 41 percent last week, the biggest selloff on record, after saying it plans to stabilize production at each of its first two wells at the Tubarao Azul field in the Campos Basin at 5,000 barrels a day, down from a previous plan to pump as much as 20,000 barrels daily at each well.
Eletropaulo gained 0.3 percent to 23.02 reais after earlier rising as much as 3.4 percent. The stock plunged yesterday after Brazil’s power regulator Aneel cut the amount the utility can charge customers by 9.3 percent.
The Bovespa earlier dropped 0.5 percent after reports showed services and manufacturing output shrank in June for a fifth month in the euro area and services unexpectedly contracted in Germany, adding to signs of an economic slump in the second quarter.
“The numbers that came out in Europe show things were bad in the second quarter, but the outlook for the region is a bit more positive as policy makers seem to be coordinating their actions a little better to tackle the crisis,” Marcio Cardoso, a partner at brokerage Titulo Corretora de Valores, said by phone from Sao Paulo. “The Bovespa may be poised for a mild recovery.”
Cosan SA Industria e Comercio rose 1.2 percent to 31.20 reais. The renewable energy and infrastructure company said in a regulatory filing yesterday it concluded the acquisition of Comma Oil & Chemicals Ltd. from Exxon Mobil Corp. as part of its strategy to enter the European market for automotive lubricants.
The Bovespa has dropped 18 percent since this year’s high on March 13 as the debt crisis in Europe worsened and growth in Brazil faltered. The index trades at 10 times analysts’ earnings estimates for the next four quarters, compared with 10.2 times for MSCI Inc.’s measure of 21 developing nations’ equities, data compiled by Bloomberg show.
Trading volume was 2.99 billion reais ($1.5 billion) in stocks in Sao Paulo, data compiled by Bloomberg show. That compares with a daily average of 7.37 billion reais this year through July 3, according to data compiled by the exchange.
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