Brazil stocks rise for third day on U.S., job data

Thu Aug 20, 2009 4:55pm EDT
(Updates to close)
By Guillermo Parra-Bernal
SAO PAULO, Aug 20 (Reuters) - Brazilian stocks rose for a third day on Thursday, led by commodity and steel producers, after encouraging job market data and U.S. manufacturing activity numbers reassured investors.
The Bovespa benchmark stock index .BVSP advanced 1.2 percent to 56,831.48, its highest level since Aug. 13. The real BRBY reversed earlier losses and closed stronger 0.1 percent at 1.844 to the dollar.
Forty-nine stocks rose and 15 fell on Thursday's session.
Fueling gains, a rebound in Chinese stocks arrested concerns the Asian economy's markets entered a bear cycle. Brazilian investors often look at the performance of U.S. and Chinese equity markets as a gauge of global confidence and risk-taking.
"Today was definitely a good day in terms of cementing confidence in a more sustained recovery," said Hersz Ferman, a market analyst with Rio de Janeiro-based Um Investimentos.
Oil CLc1 rose 0.2 percent to $72.70, reflecting optimism on the recovery of the global economy, which is undergoing the deepest slowdown since at least the 1950s. That pushed preferred shares of oil giant Petrobras (PETR4.SA), Brazil's largest company by market value, up 0.8 percent to $33.05 reais.
Vale's preferred shares (VALE5.SA) rose 1 percent to 32.46 reais after the rally in Chinese equities eased concern the global recovery is faltering. Petrobras and Vale are the index's biggest stocks, with a combined participation of more than a third.
Real estate developer Cyrela (CYRE3.SA), Brazil's largest homebuilder, surged 5.7 percent to 22.3 reais. Government data showed household income rose and unemployment dropped for a fifth straight month in July.
The jobless rate BRUNR=ECI dipped to 8 percent in July from 8.1 percent in June, beating forecasts of an increase to 8.3 percent.
Average monthly household income, or family earnings discounted for inflation, rose 0.5 percent in July from June to 1,323.3 reais ($720.35). Income, a measure of workers' purchasing power in Latin America's largest economy, rose 3.4 percent from a year earlier.
"The data this morning was encouraging," said Luciano Rostagno, a senior market economist with CM Capital Markets in Sao Paulo.
Recent data pointing at reviving industrial numbers are fanning hopes that the recovery in Brazil's $1.5 trillion economy is gaining traction, Ferman said.
Usiminas (USIM5.SA), Brazil's largest producer of flat steel, gained 2.5 percent to 46.85 reais as traders bet a recovery in the automotive industry will be followed by stronger exports of vehicles. Usiminas is the biggest supplier of steel used by automakers in Brazil.
Aracruz (ARCZ6.SA) rallied for a third day, jumping 5.8 percent to 3.8 reais, on expectations the company will soon announce price increase for the pulp it sells in international markets.
Yields on Brazilian interest rate futures contracts <0#dij:> rose after the unemployment numbers damped expectations of further reductions in borrowing costs.
The rate on the contract due in January 2010 DIJF0 was up 2 basis points, or 0.02 percentage point, to 8.60 percent. The yield on the Jan. 2011 contract DIJF1 rose 4 basis points to 9.58 percent.
The yields often reflect investors' expectations over the future level of the benchmark Selic interest rate, which currently stands at a record-low 8.75 percent.
(Editing by Andrea Ricci and Diane Craft)