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Brazilian stocks gain on interest rates

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The Bovespa index rose to a three-week high as homebuilder, MRV Engenharia & Participacoes SA, led gains by companies that sell locally amid bets that policy makers will keep borrowing costs at record lows.

Companies controlled by billionaire Eike Batista, including port developer LLX Logistica SA and iron-ore producer MMX Mineracao & Metalicos SA were among the best performers on the benchmark.

Bloomberg News reported that real estate brokerages LPS Brasil Consultoria de Imoveis SA and Brasil Brokers Participacoes gained after Citigroup Incorported rated both stocks a buy in new coverage.

 All 10 industry groups on the MSCI Brazil index advanced.

The Bovespa climbed by 1.7 per cent to 56,856.79 in Sao Paulo, the most on a closing basis since March 6.

Sixty stocks gained on the gauge while eight dropped. The real strengthened by 0.2 per cent to 1.9777 per dollar.

Brazilian swap rates on contracts due in January fell by 0.01 percentage point to 7.87 per cent after data released by the national statistics agency showed inflation slowed more than forecast last month.

“Inflation figures came in lower than expected, which is good for equities, as it may give some room for the central bank to postpone interest-rate increases,” the chief strategist at Sao Paulo-based brokerage SLW Corretora, Mr. Pedro Galdi, said in a telephone interview.

Consumer prices in Brazil as measured by the IPCA index rose by 0.47 per cent in March after climbing by 0.60 per cent in the prior month, the national statistics agency reported.

The median estimate of economists surveyed by Bloomberg was for a 0.50 per cent increase. Annual inflation accelerated to 6.59 per cent, exceeding the 6.50 per cent upper limit of the central bank’s target range for the first time since November 2011.


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