Brazilian Stocks Gain on Rate Outlook; Petrobras Surges on Oil

By Alexander Ragir

Dec. 15 (Bloomberg) -- Brazilian stocks rose for a second day on the prospects that the central bank may accelerate interest-rate cuts next year and surging oil prices may bolster the earnings outlook for energy companies.

Petroleo Brasileiro SA, Brazil’s state-controlled oil company, gained for a fourth day as oil advanced more than 6 percent to $49 a barrel. Rossi Residencial SA led a rally in homebuilders after Brazilian economists cut their 2009 interest rate estimate to 13 percent.

The Bovespa Index climbed 0.3 percent to 39,492.19 at 8:28 a.m. New York time. The gauge surged 11 percent last week. Chile’s Ipsa was little changed.

Petrobras advanced 3.5 percent to 23.40 euros. Oil rose after OPEC’s Secretary-General Abdalla El-Badri said the group needs to make a “sizeable” production cut at this week’s meeting in Algeria.

Rossi gained 4.5 percent to 3.75 reais. Brazil’s benchmark interest rate, known as Selic, will end 2009 at 13 percent, lower than a 13.25 percent forecast a week earlier, according to a central bank survey of about 100 economists.

Brazil’s central bank may signal this week it’s ready to cut rates from a two-year high, betting the slowing economy will help rein in consumer prices. Economists expect policy makers to use the minutes of their board meeting last week, to be disclosed Dec. 18, to explain why they voted unanimously to keep the benchmark rate at 13.75 percent after discussing “the possibility of lowering” it.

The BM&FBovespa Small Cap index rose 0.8 percent. The BM&FBovespa MidLarge Cap index gained 0.6 percent.

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