The Rising Influence of Rising Affluence

[DewDiligence]

Bovespa Is Partying Like It’s Carnaval Every Day

http://www.reuters.com/article/marketsNews/idCNN1939377120091019

›Brazil stocks at highest closing level in over a year

Mon Oct 19, 2009 5:49pm EDT

SAO PAULO, Oct 19 (Reuters) - Brazilian stocks rallied on Monday, to its highest closing level in more than a year as global stocks surged to fresh 12-month highs and as heavyweight commodity stocks jumped.

The benchmark Bovespa index .BVSP surged 1.57 percent to 67,239.45 points -- its highest closing level since June 2008. The index has gained about 79 percent so far this year.

The real (BRBY), however, weakened slightly to 1.710 per dollar. [The Real is up 35% vs the Dollar this year—see next post.]

Global stocks rallied as surprisingly strong corporate results spurred a bullish mood in financial markets, also boosting the price of oil and other commodities.

…Upbeat expectations on the global economy tends to boost oil and metal prices on the view that demand for commodities will improve in tandem to a recovery.

In local trading, mining giant Vale (VALE) was the biggest weighted gainer, up 3.11 percent to 41.40 reais. State-run oil company Petrobras also surged, gaining 2.64 percent as oil prices rallied above $79 a barrel.

Vale has recently seen not only "good demand from China (as shown in recent Chinese imports data) but also very important a pick up in demand from the ex-China world," said a Credit Suisse report dated Monday.

Steelmakers have benefited in recent weeks from expectations that Rio de Janeiro's victorious Olympic bid for 2016 will boost development and infrastructure projects in Latin America's largest economy.

"The structural fundamentals for the steel industry remain in place and we reiterate our positive outlook for sector," noted a Deutsche Bank report dated Monday by analyst Rodrigo Barros.

Interest rate futures were broadly higher. The central bank is widely expected to keep rates steady when it meets this week but to raise rates next year.‹