Brazil Stocks Post Third Weekly Gain as Commodity Stocks Rise

(Bloomberg) -- The Ibovespa headed for its third consecutive weekly gain as raw-materials producers rallied.

A gauge of commodities producers was the best-performing sector on the MSCI Brazil Index as iron-ore miner Vale SA and steelmaker Gerdau SA both climbed to the highest price since May 2015. Companies that get a significant part of their revenue from abroad, including meatpacker Marfrig Global Foods SA, rose as the real weakened.

This week’s gain pushed the advance this year to 85 percent in dollar terms, the best in the world, amid optimism that the government that replaced impeached former President Dilma Rousseff will be able to pull the country out of its worst recession in more than a century. A brighter outlook for the nations’ exports of raw materials, which make up for more than half of its sales abroad, is seen as a boost to the rebound efforts.

"The trend for raw materials is a key factor for Brazil’s recovery," Pedro Galdi, a partner at the equity research firm Upside Investor, said from Sao Paulo. "Recently, producers are doing better on the stock market, which is very encouraging."

The Ibovespa added 0.4 percent to 64,108.08 at the close of trading in Sao Paulo. Thirty-four of its 58 stocks advanced as the gauge’s weekly gain reached 3.8 percent. Petroleo Brasileiro SA, the state-controlled oil producer, climbed 1.2 percent, while Vale and Gerdau added 4 percent each. The MSCI Brazil/Materials Index gained 3.1 percent. Marfrig rose 1.9 percent.

Localiza Rent a Car SA led declines on the Ibovespa, slumping 4.2 percent after reporting third-quarter sales that trailed analysts’ estimates.