Brazil stocks rise on bottom fishing, real gains

Thu May 14, 2009 4:47pm EDT
(Updates to close)
SAO PAULO, May 14 (Reuters) - Brazil's stocks rose for the first day in four on Thursday as investors went bottom fishing for stocks that had slumped in recent sessions, while the national currency gained on rising investment inflows.
The Bovespa index .BVSP of the Sao Paulo stock exchange rose 1.58 percent to 49,446.02, its first gain after dropping 5.3 percent over three straight sessions. Commodity companies such as mining giant Vale, oil company Petrobras and pulp producer Aracruz were among top gainers behind the rise.
"There was a recovery in commodities, which helped a bit," said Andre Hanna Farath, an analyst at the Interfloat brokerage. "It recovered today, but the volume was weak."
Brazil's currency BRBY, the real, strengthened 1 percent to 2.084 per U.S. dollar as rising stock markets in the United States and Europe increased appetite for emerging market assets and boosted investments inflows to Brazil.
"Inflows are quite large. This ends up strengthening the real," said Clodoir Vieira, chief economist at brokerage Souza Barros.
Interest rate futures <0#dij:> fell after weak retail sales data signaled a series of recent rate cuts have failed to stoke consumer demand.
The futures also declined after Brazil's government unveiled plans to tax returns on savings deposits, a key issue that had been keeping the central bank from cutting domestic borrowing costs. For details please see [ID:nN13415027].
On the stock exchange, mining giant Vale (VALE5.SA) rose 0.9 percent to 31.38 reais, rebounding after a 5.2 percent slump over two straight sessions. Bradesco (BBDC4.SA), Brazil's second-largest private sector bank, went up 1.9 percent to 27.36 reais, its first gain after a 7.4 percent tumble over the previous three sessions.
State-run oil company Petrobras (PETR4.SA) rose 0.83 percent to 31.74 reais, also helping push the index higher as crude prices climbed in New York CLc1. The stock dropped 4.6 percent over the previous three sessions.
Aracruz (ARCZ6.SA) gained 3.63 percent to 3.14 reais. The company reported on Thursday a first-quarter loss of 1.7 million reais, reversing profits of 168 million reais a year earlier because of a surge in shipping costs and the price of timber. For more see [ID:nN14291840].
Banco do Brasil (BBAS3.SA), Brazil's largest government-controlled bank by assets, rose 4.39 percent to 20.20 reais. The bank said on Thursday first-quarter net income sank 29 percent to 1.67 billion reais because of an increase in bad debt provisions. [ID:nN14464657]
CSN (CSNA3.SA) lost 0.66 percent to 40.78 reais. The company on Thursday reported a 52 percent fall in first-quarter profit to 369 million reais as the global economic slump cut demand for steel products in key export markets and in Brazil.
Usiminas (USIM5.SA), Brazil's largest producer of steel used in the automobile and appliances industry, sank 3.92 percent to 32.10 reais. The company reported late on Wednesday an unexpected net loss of 112 million reais in the first quarter as sales sank 25 percent year-on-year. Analysts in a Reuters survey had forecast profits of 243.8 million reais. (Reporting by Aluisio Alves and Jose de Castro; Writing by Elzio Barreto; Editing by James Dalgleish)