Ibovespa Rises as Vale Gain Offsets Disappointing Ambev Results

(Bloomberg) -- The Ibovespa posted its fourth consecutive weekly gain as iron ore prices pushed miner Vale SA higher, overshadowing brewer Ambev’s lower-than-estimated profit.

Vale added to a sixth weekly advance. Steelmakers Usinas Siderurgicas de Minas Gerais SA and Metalurgica Gerdau SA were among the best performers. Ambev SA dropped the most in three months after it became the latest in a series of companies that sell in the domestic market to report disappointing earnings as Brazil continues to limp through a recession. Brazilian stocks pared gains after the Federal Bureau of Investigation reopened its inquiry into Hillary Clinton’s use of an unauthorized e-mail server.

The Ibovespa has climbed 85 percent in dollar terms this year, the best performance in the world, on optimism that the government will be able to shore up the country’s budget and restore growth. While corporate profits show that the economy remains weak, commodity exporters have buoyed the stock market as they benefit from higher prices for their products.

"Raw-materials producers are sustaining the stock market," Rafael Ohmachi, an analyst at brokerage Guide Investimentos, said from Sao Paulo. "We should continue to see negative surprises from consumer companies."

The Ibovespa added 0.1 percent to 64,307.63 at the close of trading in Sao Paulo after falling as much as 0.7 percent after the FBI investigation became public. Vale climbed as much as 1.7 percent, paring gains to 0.3 percent at the end of the session, after iron ore rallied to to the highest price in six months. Usiminas, as Usinas Siderurgicas is known, rose 11 percent after posting third-quarter revenue that exceeded forecast, and Metalurgica Gerdau advanced 3 percent.

Ambev fell 2.1 percent. Among the five consumer companies that have already announced earnings for the three months through September, three trailed analysts’ estimates for revenue, according to data compiled by Bloomberg. Brazil’s gross domestic product is projected to contract 3.22 percent this year after shrinking 3.8 percent in 2015, according to a weekly survey by the central bank.

Medical diagnostics provider Alliar Medicos a Frente fell 4 percent on its trading debut after Brazil’s first initial public offering in 16 months.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net. To contact the editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net, Sebastian Boyd, Ney Hayashi