Brazilian Stocks Gain on Stimulus Plan, Rate Cuts; Ipsa Rises

By Paulo Winterstein

Feb. 3 (Bloomberg) -- Brazilian stocks gained for the first time in four days on speculation economic stimulus measures globally and interest-rate cuts at home will boost demand for commodities.

Petroleo Brasileiro SA rose 1.7 percent after the Financial Times said the state-controlled oil company is in talks with the U.S. and Chinese governments to help finance development of its reserves. Steelmaker Cia. Siderurgica Nacional SA and miner Cia. Vale do Rio Doce climbed after metals advanced in London.

“Some industries have already priced in a very negative outlook,” said Roni Lacerda, who helps manage the equivalent of $624 million at Mercatto Gestao de Recursos in Rio de Janeiro. “In the mining sector you see some positive signs -- even as the environment points to a very difficult year -- such as signs of falling ore stockpiles in China, recovering prices and freight prices rebounding.”

The Bovespa rose 154.19, or 0.4 percent to 38,820.63 at 8:19 a.m. New York time. Chile’s Ipsa was little changed, gaining 0.1 percent. The MSCI Emerging Markets Index added 1 percent.

China, the world’s second-biggest energy consumer, may enact a stimulus plan for the oil refining and petrochemicals industry before a gathering of the country’s legislature to help spur the slowing economy, an official said. In the U.S., the Obama administration is considering government guarantees for home loans modified by their servicers, seeking to stem the record surge of foreclosures that’s hammering U.S. property values.

Petrobras, as the Rio de Janeiro-based oil company is known, has had talks with the U.S. and Chinese governments, among others, for help in financing the development of its oil reserves, the Financial Times reported, citing Chief Executive Officer Jose Sergio Gabrielli de Azevedo. Petrobras rose 1.7 percent to 25.10 reais.

Rate Outlook

Brazil’s central bank may cut rates more aggressively than previously forecast after industrial production plunged the most in 17 years in December.

Industrial output shrank 14.5 percent in December from the same month a year earlier, the national statistics agency IBGE said in Rio de Janeiro. The result was greater than the median forecast of a 10.3 percent drop in a Bloomberg survey of 22 economists.

Brazil’s benchmark interest rate will fall to 10.75 percent by the end of the year from 12.75 percent currently, compared with a forecast of 11 percent a week ago, economists in a weekly central bank survey published yesterday showed. The rate will end 2010 at 10.50 percent compared with a forecast of 10.75 percent a week earlier.

“Some stocks haven’t responded yet to the decline in the interest rate curve,” said Lacerda.

CSN, as Brazil’s third-biggest steelmaker is known, rose 1.1 percent to 35.59 reais. The Rio de Janeiro-based company is the “best prepared steelmaker in the region to endure” a global slowdown, analyst Francisco Schumacher wrote.

Vale, the world’s biggest iron-ore producer and second- biggest nickel producer, rose 1.1 percent to 28.06 reais. Nickel gained for a second day, adding 1 percent in London trading.

To contact the reporters on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.