Brazilian Stocks Rise, Led by Homebuilders; Bolsa, Ipsa Decline

By Alexander Ragir and Fabio Alves

Nov. 25 (Bloomberg) -- Brazilian stocks gained for a second day as an increase in mortgage loans in Latin America’s biggest economy and the Federal Reserve’s $800 billion plan to support consumers and homebuyers eased concerns about the credit crisis.

Homebuilder Cyrela Brazil Realty SA Empreendimentos e Participacoes surged 14 percent after mortgage loans rose last month. Banks and credit-card processor Redecard SA rallied after the Fed announced two new efforts to ease credit markets for homebuyers, consumers and small businesses. Cia. Siderurgica Nacional led gains for steelmakers after BHP Billiton’s bid for the second-biggest iron ore maker failed. Brazil’s two biggest airlines dropped after Citigroup Inc. cuts its forecast for their American depositary receipts.

“The Fed move brings back some confidence in financial markets, cleared out the problem even more and gives some breathing room for it to function better,” said Januario Hostin Junior, chief equity portfolio manager at Leme Investimentos in Florianopolis, Brazil, which oversees about $35 Million.

The Bovespa rose 1.8 percent to 34,812.86. Mexico’s Bolsa slid 1.2 percent. Chile’s Ipsa slipped 0.4 percent. The MSCI Emerging Markets Index rose 3.2 percent.

Cyrela surged the second most on the Bovespa after a central bank report showed in mortgage loans increased last month even as overall bank lending slowed.

Mortgage Increase

Year-to-date mortgage loans increased 30 percent through the end of October to 56.4 billion reais ($24.5 billion), the central bank said today. Mortgage loans rose 2.7 percent in October from the previous month, while overall bank lending contracted 3 percent to 157.3 billion reais.

Cyrela jumped 14 percent to 7.20 reais. Gafisa SA, the second-largest, added 4.6 percent to 7.90 reais.

Redecard gained 5.9 percent to 25 reais. Goldman Sachs Group Inc. said the company’s third-quarter earnings beat its estimates and that it expected Redecard to deliver on its expected growth.

A gauge of bank stocks in the MSCI Brazil Index climbed 4.3 percent. Banco Itau Holding Financeira SA, which is acquiring Uniao de Bancos Brasileiros SA to become the region’s biggest bank, jumped 4.6 percent to 24.69 reais. Unibanco rose 4.5 percent to 13.79 reais.

The U.S. central bank will purchase as much as $600 billion in debt issued or backed by government-chartered housing-finance companies. It will also set up a program of $200 billion to support consumer and small-business loans, the Fed said in statements today in Washington.

CSN, Brazil’s third-biggest steelmaker, advanced 4.3 percent to 24.26 reais. Aluminum Corp. of China, the largest shareholder in Rio Tinto Group, said BHP Billiton Ltd.’s dropped bid for the world’s second-largest iron ore supplier would benefit Chinese steelmakers.

‘Positive For Steelmakers’

“BHP’s failed takeover bid is positive for steelmakers because further concentration of iron ore supplier would translate in higher prices for the metal in the long term as the bigger producers would have more bargaining power,” said Francisco Schumacher, an analyst at Raymond James & Associates.

Gol Linhas Aereas Inteligentes SA, Brazil’s second-largest carrier, tumbled 5.3 percent to 7.54 reais after Citigroup reduced its estimate for the ADRs by 9.5 percent on concern that leisure travel will slow. Tam SA, the biggest carrier, slid 4.9 percent to 14.50 reais. Citigroup cut its estimate for Tam ADRs by 27 percent to $24, citing hedging and foreign exchange losses.

The BM&FBovespa MidLarge Cap index added 1.9 percent, while the BM&FBovespa Small Cap index added 0.1 percent.

Bolsa drops

Mexico’s Bolsa index fell for the first time in three days, as auto parts maker Alfa SAB dropped the most in three weeks on speculation General Motors Corp. may need government help to avoid bankruptcy liquidation.

Alfa, the world’s biggest maker of aluminum engine heads and blocks, declined 7.8 percent to 24.45 pesos. General Motors may need to cut costs and debt in addition to getting a government- backed bankruptcy plan to remain viable, Merrill Lynch & Co and JPMorgan Chase & Co. analysts said. Alfa gets about 30 percent of revenue from auto parts revenue, including sales to GM.

Argentina’s Merval rose 0.5 percent, Colombia’s IGBC gained 0.8 percent and Peru’s Lima General dropped 2.7 percent.

To contact the reporters on this story: Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net; Fabio Alves in New York at falves3@bloomberg.net.