Brazil Stocks Rise Most in Week, Led by Homebuilders, Petrobras

By Alexander Ragir

Oct. 20 (Bloomberg) -- Brazilian stocks gained the most in a week on speculation the government will take measures to boost the economy and ease the credit crisis including providing support to the country's battered homebuilders.

Rossi Residencial SA led a rally in real estate companies after Banco Santander SA said the government may demand that banks increase mortgage lending and give tax breaks to homebuilders. Banks and retailers rallied after Finance Minister Guido Mantega told Folha de S. Paulo that Brazil's economy will grow 4 percent next year. Petroleo Brasileiro SA, Brazil's state- controlled oil company, surged more than 6 percent after its monthly oil production rose to a record.

The Bovespa gained for the first time in four days, rising 4.8 percent to 38,144.54 at 10:03 a.m. New York time. The BM&FBovespa MidLarge Cap index added 3.7 percent, while the BM&FBovespa Small Cap index gained 2.1 percent. Mexico's Bolsa Index climbed 1.8 percent and Chile's Ipsa rose 3.1 percent.

Rossi jumped 6.9 percent to 3.90 reais. Statements by Finance Minister Guido Mantega and Cabinet Chief of Staff Dilma Rousseff show that the government is studying measures to support real estate development, Santander analyst Marcello Milman wrote. The government may increase the amount that banks must use from their savings deposits to finance home acquisition, Milman wrote. The current level is at 65 percent of savings deposits, he wrote.

Mantega said gross domestic product may expand as much as 4.5 percent in 2009, the Sao Paulo-based newspaper Folha de S. Paulo reported.

Petrobras rose 1.44 to 24.43 reais. Crude oil for November delivery climbed 2.4 percent to $73.54 a barrel.

To contact the reporter on this story: Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net.