The Bovespa index rebounded from a four-month low as homebuilders advanced after a report showed inflation slowed more than economists forecast, damping speculation that policy makers will raise interest rates.
Cyrela Brazil Realty SA Empreendimentos e Participacoes was the best performer on the BM&FBovespa Real Estate Index after reporting earnings before interest, taxes, depreciation and amortization that exceeded analysts’ forecasts. Steelmaker Cia. Siderurgica Nacional SA (CSNA3) followed metal prices higher.
The Bovespa rose 0.2 percent to 55,672.57 at 10:29 a.m. in Sao Paulo, paring this week’s drop to 2.1 percent. Thirty-three stocks gained today while an equal number fell. The real weakened 0.3 percent to 2.0137 per dollar.
“Inflation figures today were better than expected,” Alvaro Bandeira, a partner at Orama Asset Management, said by phone from Rio de Janeiro. “Inflation will probably slow more in the second half of the year, and stocks are pricing in this expectation.”
Consumer prices, as measured by the government’s IPCA-15 price index, increased 0.49 percent in the month through mid- March after rising 0.68 percent in the previous period. The median forecast in a Bloomberg survey of economists was for a 0.53 percent increase.
Swap rates declined after the report as traders pared bets that policy makers will raise the benchmark rate from a record low 7.25 percent to curb inflation. Rates on the swaps contract due in January 2015 fell five basis points, or 0.05 percentage point, to 8.54 percent.
Cyrela gained 4.6 percent to 16.78 reais. CSN, as Cia. Siderurgica is known, added 1.4 percent to 9.25 reais.
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