Brazil stocks higher on US GDP; currency near flat

SAO PAULO, Jan 29 (BestGrowthStock) – Brazilian stocks rose in
early trading on Friday, as U.S. economic growth data buoyed
investor optimism about the strength of the global recovery.

The benchmark Bovespa index (.BVSP: ) rose 1.3 percent to
66,442.95, on track for a second session of gains.

The government said the U.S. economy grew 5.7 percent in
the fourth quarter, beating forecasts and underscoring a
recovery in the world’s largest economy. For details, see
[ID:nCAT005061].

Analysts, in a Reuters survey, looked for fourth-quarter
U.S. GDP hitting 4.6 percent, up from 2.2 percent in the third
quarter. [ID:nN28246399]

The news boosted equities both in Brazil and in the United
States, where stock index futures rose sharply on the data.
[ID:nN29221763]

In addition, the U.S. Senate confirmation of Ben Bernanke
as chairman of the U.S. Federal Reserve on Thursday, despite
grumblings about his performance, also calmed investors.
[ID:nN27143856]

“He’s already well experienced in handling a crisis,” said
Joao Pedro Brugger, an analyst with Leme Investimentos.
Bernanke, he added, is a known entity among investors.

Reassurances from Europe that Greece would not default
helped ease fears the country might default on its debt. The
concerns have cast a pall over markets in recent weeks.
[ID:nLDE60S0XN]

Among Brazilian stocks, heavyweights Vale and Petrobras led
gains.

Mining company Vale (VALE5.SA: ), the world’s largest
producer of iron ore, added 1.9 percent to 42.95 reais. Vale
said late Thursday it signed a contract with fertilizer company
Yara to buy its stakes in Fosfertil (FFTL4.SA: ) and Fertifos,
one day after announcing the purchase of Bunge Ltd’s (BG.N: )
fertilizer assets in Brazil. [ID:nN29130110]

State-controlled energy giant Petrobras (PETR4.SA: ) rose
1.04 percent to 34.97 reais, as crude oil futures (CLc1: )
climbed 1 percent.

Jumping as much as 11 percent in the morning, utility Cesp
(CESP6.SA: ) leaped 8.46 percent to 24.62 reais near midday on
talk the government could renew concessions for electric
utilities. [ID:nN29216356]

Also gaining were steelmakers. Gerdau (GGBR4.SA: ) moved up
2.11 percent to 26.14 reais, Usiminas (USIM5.SA: ) climbed 1.85
percent to 49.55 reais, and CSN (CSNA3.SA: ) advanced 1.99
percent to 55.37 reais.

Brazil’s currency, the real (BRBY: ), dipped 0.05 percent to
1.867 per dollar.

The real jumped about 34 percent against the dollar in
2009, worrying the government and exporters. But so far this
year, the currency has weakened 6.6 percent.

Brazilian Finance Minister Guido Mantega said in Davos on
Friday he was happy with real weakness so far this year, but
that the currency has not yet reached equilibrium.
[ID:nLDE60S1L0]

Changes in yields on Brazilian interest rate futures
contracts (0#DIJ:: ) were mixed, with yields on some falling.

The yield on the contract due January 2011 (DIJF1: ) edged
down to 10.31 percent from 10.34 percent. The yield on the
contract due January 2012 (DIJF2: ) edged off to 11.71 percent
from 11.75 percent.

Investors use the contracts to bet on trends in the
country’s benchmark interest rate, the Selic, which
policymakers held at a record low 8.75 percent late on
Wednesday.

Mantega also said Friday the country’s inflation is under
control.

The central bank uses an inflation target, pegged in 2010
at 4.5 percent, plus or minus 2 percentage points, as a guide
in setting interest rates.

Investing Basics

(Reporting by Luciana Lopez; editing by Jeffrey Benkoe)

Brazil stocks higher on US GDP; currency near flat