Brazil Stocks Rise on Commodity Rally, Vale Gains; Bolsa Climbs

By Alexander Ragir

March 13 (Bloomberg) -- Brazilian stocks rose, heading for the biggest weekly gain in a month, after global bank shares advanced and China signaled more measures to bolster its economy, improving the outlook for commodities.

Cia. Vale do Rio Doce and Petroleo Brasileiro SA, the two biggest stocks in the Bovespa index, led gains for commodity producers after China said it can add “at any time” to 4 trillion yuan ($585 billion) of stimulus measures. Banco do Brasil SA rose more than 2 percent, pacing advances for banks after Bank of America Corp. said it will be profitable this year.

“It’s encouraging and is helping the market rally a bit,” said Fernando Aldabalde, whose GS Allocation Dinamico FI Multimercado hedge fund in Rio de Janeiro gained 16 percent last year, beating 90 percent of its peers. “It’s not clear whether this is just an excuse to buy on an over-sold market or if it’s something sustainable. But if these banks are profitable it’ll make the Treasury’s job a lot easier.”

The Bovespa added 0.9 percent to 39,514.16 at 9:38 a.m. New York time. The gauge has risen 6.4 percent this week, paced by retailers after the central bank cut interest rates by the most in five years.

Mexico’s Bolsa gained 1.3 percent, while Chile’s Ipsa climbed 0.4 percent. The MSCI Emerging Markets index gained 2.6 percent.

Banco do Brasil added 2.4 percent to 14.64 reais, the highest intraday price in a month. Banco Itau Holding Financeira SA, Latin America’s biggest financial services company, rose 1.3 percent to 24.17 reais. Uniao de Bancos Brasileiros SA, acquired by Itau, rose 1.5 percent to 13.85 reais.

Commodities

Bank of America joined two of its biggest competitors, JPMorgan Chase & Co. and Citigroup Inc., in saying that it made money during the first two months of the year, rebounding from the worst year for financial institutions since the Great Depression.

Vale added 27 centavos to 27.37 reais. The Bloomberg Base Metals 3-Month Price Commodity Index gained 1.2 percent to 116.29.

Petrobras rose 1 percent to 27.83 reais. Crude headed for a fourth weekly gain as OPEC prepared to meet this weekend to consider a cut in output.

China can add “at any time” to 4 trillion yuan ($585 billion) of stimulus measures to revive the world’s third- biggest economy, Premier Wen Jiabao told reporters in Beijing. He reaffirmed China’s target for 8 percent growth in 2009.

In Japan, Prime Minister Taro Aso will ask ministers to propose measures and may be ready to announce a package to world leaders at the Group of 20 summit in the U.K. in April, Finance Minister Kaoru Yosano said in Tokyo.

The Bovespa has gained 5 percent this year. It touched a high of 42,755.50, a 14 percent rise for the year, on Feb. 6 before paring gains on concern exports in Latin America’s largest economy will slow under the weight of recessions in the U.S., Japan and Europe.

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