Aug. 23 (Bloomberg) -- The Ibovespa rose to an 11-week high as Rossi Residencial SA led homebuilders higher after Brazil’s central bank intervened to strengthen the real, easing concern that a weaker currency will fuel inflation.
Competitor Gafisa SA rose the most since February, while retailers Cia. Hering and Lojas Renner SA also gained. OGX Petroleo e Gas Participacoes SA, the oil producer founded by Brazil’s former billionaire Eike Batista, extended a weekly rally to 21 percent. Exporters including pulp producer Fibria Celulose SA tumbled amid speculation that a stronger currency will limit gains on sales outside Brazil.
The Ibovespa rose 1.6 percent to 52,197.06 at the close of trading in Sao Paulo. The gauge gained 1.3 percent this week. The real climbed 3.5 percent to 2.3525 per U.S. dollar at 5:27 p.m. local time, paring its three-month decline to 13 percent, still the worst performance in major emerging markets.
“The outlook for equities is positive, at least in the short term, as the impact the currency could have on inflation is a big concern, and the central bank’s intervention addresses that,” Luis Gustavo Pereira, an analyst at Futura Corretora brokerage, said by phone from Sao Paulo. “But if the central bank keeps this tougher stance regarding the currency, it will be bad for exporters.”
The central bank will auction $1 billion of dollar loans every Friday starting today and offer the equivalent of $500 million worth of foreign-exchange swaps each day Monday through Thursday, according to a statement late yesterday. The program will run through Dec. 31.
Fibria, whose sales outside Brazil account for about 90 percent of its revenue, fell 3 percent to 28.10 reais. Shares had gained 14 percent this month through yesterday amid speculation a weaker real would increase overseas sales.
Rossi rose 9.5 percent to 3 reais. Gafisa jumped 8.4 percent to 3.10 reais. OGX rose 5.2 percent to 81 centavos. Hering added 5.3 percent to 31.90 reais, and Renner gained 4.1 percent to 60.62 reais. Brazilian swap rates on contracts due in January 2015 fell 35 basis points, or 0.35 percentage point, to 10.24 percent.
The Ibovespa has gained 16 percent from this year’s low on July 3 as higher commodities prices and a weaker real boosted raw-material exporters. The MSCI Emerging Markets Index of 21 developing nations’ equities advanced 2.5 percent during the same period.
Trading volume of stocks in Sao Paulo today was 7.3 billion reais, according to data compiled by Bloomberg. That compares with a daily average of 7.76 billion reais this year through Aug. 20, according to data compiled by the exchange.
--Editors: Richard Richtmyer, Bradley Keoun