Brazil’s Ibovespa climbs as parties abandon Rousseff



Brazil’s Ibovespa equity index rallied to a 10-month high as traders increased wagers that President Dilma Rousseff will be impeached, paving the way for a new government to pull the economy out of its worst recession in a century.
State-controlled oil producer Petroleo Brasileiro SA, iron ore miner Vale SA and lender Itau Unibanco Holding SA contributed the most to the gauge’s advance after PP, Brazil’s fourth-biggest political party by number of lawmakers, and a smaller party known as PRB decided to abandon the ruling coalition. That decreases the chances Rousseff will prevail when the lower house votes April 17 on whether to continue the impeachment process.
“The desertion of parties is a very clear signal that the government is coming to an end,” Jason Vieira, the chief economist at Infinity Asset Management in Sao Paulo, who got his first job as an assistant trader at Brazil’s exchange in 1992, the year Fernando Collor de Mello stepped down rather than face impeachment. “That hope has been the main driver for Brazil’s stocks recently. Every piece of news helps to adjust the expectations.”
The Ibovespa gained 2.3 percent to 53,177.71, the highest since June 26, at 10:53 a.m. in Sao Paulo as all except one of its 61 stocks rose. Itau added 2 percent and Petrobras advanced 3.8 percent. Vale added 5 percent after trade data from China fueled optimism over the growth of the country, which is its main export destiny.
The real weakened 1 percent to 3.523 per dollar.

Leave a Reply

Send this to a friend