Brazilian Real Advances as Stock Gains Boosts Risk Appetite

By Adriana Brasileiro

Nov. 4 (Bloomberg) -- Brazil's real rose the most in a week as advances in world stocks stoked investor appetite for higher yielding emerging-market assets.

The real rose 1.8 percent to 2.1410 per U.S. dollar at 7:44 a.m. New York time from 2.1795 yesterday. It's the biggest gain since the currency increased 4.15 percent on Oct. 28. The real fell 12 percent in October, the third consecutive monthly loss.

``We are optimistic in the very short term, but the market's mood will continue to be volatile,'' said Gabriel Levy, an economist who helps manage 250 million reais ($117 million) at Sparta Administradora de Recursos, an asset-management firm in Sao Paulo.

European and Asian stocks rose, sending the MSCI World Index to its sixth straight advance, on better-than-expected corporate results. U.S. stock-index futures advanced.

Yields on local bonds and rate-future contracts fell.

The yield on Brazil's zero-coupon bond due in January 2010 fell 13 basis points, or 0.13 percentage point, to 15.57 percent, according to Banco Votorantim.

The yield on Brazil's overnight futures contract for January 2009 delivery fell 1 basis point to 13.72 percent.

To contact the reporter on this story: Adriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net