Brazilian Stocks Lead World Gains on Market Inflows Outlook

(Bloomberg) -- The Ibovespa posted the biggest rally among major stock benchmarks after data showing the U.S. economy is on uneven footing bolstered wagers that policy makers will keep borrowing costs suppressed.

Almost five stocks rose for every one that fell on the index, with gains led by banks, commodity producers and BM&FBovespa SA, operator of Latin America’s largest exchange. The Ibovespa added 1.5 percent, the most in two weeks.

Brazilian assets were swept up in a rally in emerging-market stocks and currencies worldwide Thursday following the U.S. data and after Bank of England policy makers signaled there’s room for another interest rate cut this year. The Ibovespa has gained 59 percent this year in dollar terms, the most in the world, on optimism that a new government will be able to restore confidence in the economy and lure investment. Lower interest rates worldwide would help that effort.

"Speculation that interest rates in developed countries may stay lower for longer is fueling gains on the Ibovespa today, as emerging-market stocks have benefited from foreign inflows in recent months,” Paulo Henrique Amantea, an analyst at the brokerage Guide Investimentos, said from Belo Horizonte. “With prospects that trading activity will grow, financial companies are attracting the most attention."

Lender Itau Unibanco Holding SA, the heaviest-weighted stock on the index, gained 2.2 percent, the most in five weeks, at the close of trading in Sao Paulo. Smaller rival Banco Bradesco SA added 2.7 percent. BM&FBovespa jumped 3.5 percent.

State-controlled oil producer Petroleo Brasileiro SA, known as Petrobras, rose 3.1 percent as oil rose for the first time in three days. Petrochemicals producer Braskem SA led gains on an MSCI index of raw-materials stocks as the Bloomberg Commodity Index added 0.5 percent. Producers account for 23 percent of the Ibovespa’s weighting.