Brazil Stocks Gain on Higher Retail Sales, Slowing Inflation

By Alexander Ragir

Dec. 16 (Bloomberg) -- Brazilian stocks climbed the most in a week as slowing inflation gave the central bank leeway to cut interest rates and retailers jumped on higher than estimated sales in October.

Banco do Brasil SA and Banco Itau Holding Financeira SA, Brazil’s two biggest banks, jumped more than 3 percent as wholesale prices rose less than expected in the past month. Lojas Renner SA led gains on the Bovespa index after retail sales advanced 10.1 percent in October from a year ago. Petroleo Brasileiro SA climbed the most in a week as oil prices advanced.

The Bovespa gained 869.22, or 2.3 percent, to 39,189.41 at 8:23 a.m. New York time. Chile’s Ipsa rose 0.3 percent. The MSCI Emerging Markets Index gained 0.7 percent.

Banco do Brasil jumped 4.2 percent to 15.52 reais. Itau gained 3.5 percent to 28.976 reais.

Wholesale prices advanced 0.03 percent, the Getulio Vargas Foundation’s IGP-10 index showed. That was less than the median estimate of a 0.1 percent gain in a Bloomberg survey of 28 economists.

Lojas Renner gained 4.1 percent to 16.35 reais. Retail sales nationwide surged in October from a year ago, led by a 44 percent jump in computer sales, the statistics agency said. The increase exceeded the forecasts of 26 of 27 economists in a Bloomberg survey and was higher than the 9.3 percent sales growth in the year through September.

Petrobras advanced 3.4 percent to 23.67 reais. Crude oil for January delivery rose as much as 2.2 percent to $45.47 a barrel in electronic trading on the New York Mercantile Exchange.

The BM&FBovespa Small Cap index rose 1.1 percent. The BM&FBovespa MidLarge Cap index gained 2.8 percent.

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