Brazilian Stocks Gain, Led by Gol, Sadia; Latin America Rises

By Paulo Winterstein and James Attwood

Oct. 1 (Bloomberg) -- Brazilian stocks gained for a second day after analysts and investors said the country's biggest commodity exporters will withstand the credit crisis.

Sadia SA led gains for food producers after Banco do Brasil's brokerage unit said its 50 percent drop in six sessions was unwarranted. JBS SA, the world's biggest beef producer, rallied on prospects a stronger dollar will boost profit. Gol Linhas Aereas Inteligentes SA, the second-worst performer on the index this year, jumped as crude fell more than 2 percent.

``We're actually reasonably positive on emerging markets from here,'' said Ben Laidler, equity strategist at JPMorgan Chase & Co. in New York. ``We've been making the case that risk aversion at this point is extreme and fingers crossed as we get this continuing official involvement globally to contain the financial crisis, that risk aversion will gradually moderate.''

The Bovespa index climbed 257.38, or 0.5 percent, to 49,798.65. The BM&FBovespa MidLarge Cap index advanced 0.1 percent, while the BM&FBovespa Small Cap index fell 0.2 percent.

Stock markets gained across Latin America after the Democratic and Republican leaders of the U.S. Senate predicted that a $700 billion financial-rescue package would win approval tonight. Mexico's Bolsa index rose 0.9 percent. The MSCI Emerging Markets Index gained 0.1 percent.

Nicholas Field, who helps oversee about $18 billion in emerging market equities at Schroders Plc., said the credit crisis probably wouldn't hurt large commodity exporters.

``When you're talking about exporters like CVRD in Brazil, then no, that's not an issue,'' he said. ``Even if prices go down everyone knows their dollar value and what they've got; they'll get the export finance if they need to.''

Sadia Gains

Sadia, which dropped 44 percent in two days after reporting a 760 million-reais loss from currency hedging operations, jumped 8.6 percent today. The sell-off was ``exaggerated,'' said Marianna Waltz, analyst at Banco do Brasil Investimentos in Sao Paulo.

JBS rose 4.4 percent to 4.95 reais. The Sao Paulo-based company said yesterday it expects gains this quarter as the dollar rallies against the Brazilian currency, boosting the value of its investments while reducing debt. Gains from the appreciation of overseas assets will total about 422 million reais ($219 million) this quarter, JBS said.

Gol, the second-biggest Brazilian carrier, jumped 9.2 percent to 13.18 reais, as the decline in oil signaled lower costs. Bigger rival Tam SA jumped 4.6 percent to 37.65 reais.

Petroleo Brasileiro SA, Brazil's state-controlled oil company and the most heavily weighted stock on the index, fell 0.6 percent to 34.90 reais.

ALL Falls

All America Latina Logistica, Latin America's largest railroad operator, dropped the most on the Bovespa, losing 13 percent to 11.30 reais.

``We believe that the contractionary forces are beginning to work in Brazil, posing downside risks to growth,'' wrote Goldman Sachs Group Inc. economists including Paulo Leme in a note. ``It is also likely that firms would postpone or delay investment decisions as they become less confident about the future.''

Mexico's Bolsa gained for a second day, led by Industrias Penoles SAB, the world's largest dedicated silver producer. Penoles jumped 12 percent to 146.17 pesos. Silver for December delivery climbed 4 percent to $12.77 an ounce in New York.

In other Latin American markets, Chile's Ipsa index rose 0.7 percent. The main indexes in Argentina, Colombia and Peru all rose, and The Morgan Stanley Capital International index of Latin American shares added 0.5 percent to 3,202.19.

To contact the reporters on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net; James Attwood in Santiago at jattwood3@bloomberg.net