investors speculated emerging markets will lead the global economic recovery.
This thing is going to bubble real good.
Brazil Stocks Jump on Commodity Rally, Emerging Market Outlook
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By Alexander Ragir
Oct. 6 (Bloomberg) -- Brazilian stocks gained for a third day as a rally in metals and oil sent the nation’s biggest raw material producers higher and investors speculated emerging markets will lead the global economic recovery.
Vale SA and Petroleo Brasileiro SA rose more than 1 percent as commodities rallied. Gerdau SA, Latin America’s biggest steelmaker, gained for a third day on speculation the 2016 Olympic Games, awarded to Rio de Janeiro, will boost infrastructure spending in Brazil.
The Bovespa index added 1.2 percent to 63,128.87 at 9:46 a.m. New York time, the highest level since July 2008. Eight stocks gained on the index for each that fell. The BM&FBovespa Small Cap index jumped 1.2 percent. Brazil’s currency, the real, rose beyond 1.75 per U.S. dollar for the first time in a year.
Output from developing economies grew at the fastest pace since June 2008 in the third quarter, according to HSBC’s Emerging Markets Index, which jumped to 55.3 in the third quarter from 50.7 in the previous three months. That signals the strongest quarterly increase in developing-economy manufacturing and services output since June 2008, the bank said.
Developing nations will lead a “multi-year” bull market in equities, spurred by economic growth and low interest rates, according to Anthony Bolton, president of investments at Fidelity International, which oversees about $141 billion.
Vale rose 1.1 percent to 37.56 reais. The Bloomberg Base Metals 3-Month Price Commodity Index added 1.2 percent as Australia raised interest rates on signs of a stronger economy and the dollar weakened.
Oil Advance
Petrobras, as the state-controlled oil company is known, gained 1.2 percent to 34.85 reais. Crude oil increased for a second day in New York as the dollar’s decline bolstered the appeal of commodities as a hedge against inflation.
Brazil’s planned $11 billion in infrastructure spending for Rio’s 2016 Olympic Games may increase demand for steel products as the city expands its subway system and builds new sports arenas and hotels. Gerdau added 2.5 percent to 25.42 reais, extending gains in the past three days to 9.8 percent.
Banco do Brasil SA climbed 1.7 percent to 31.37 reais. Latin America’s largest lender said it may form a “strategic” alliance with Spanish insurer Mapfre SA as it expands in insurance to offset pressure on margins from lower interest rates and rising competition.
To contact the reporter on this story: Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net
Last Updated: October 6, 2009 10:12 EDT |
