Brazil’s main stock index rose for a third week as slowing inflation spurred expectations the central bank will cut interest rates this month.
The Bovespa index of the 57 most traded stocks of the Sao Paulo stock exchange rose 479.85, or 1.7 percent, to 29,307.91, making a 3.5 percent gain this week, a third weekly gain. Gerdau SA, Latin America’s largest steelmaker, led the weekly gain. Elsewhere in the region, Mexico’s Bolsa rose 156.96, or 1 percent, to 15,212.88, for a 3 percent weekly gain.
Brazil’s annual inflation rate dropped to a 15-month low of 6.02 percent in August, the government said on Sept. 6. The slowing inflation increased the likelihood the central bank next week will cut its benchmark interest rate for the first time since April 2004, said investors such as Pedro Thomazoni, who handles proprietary stock trading at Banco Votorantim.
“What we have now is a combination of higher-than-expected growth with a real possibility of cut in rates,'’ he said in a phone interview from Sao Paulo. “The market is pricing in a more positive economic scenario.'’
Nine out of 11 economist surveyed by Bloomberg expect monetary policy makers to cut rates in their meeting next week.
On Aug. 31 the government said Brazil’s economy expanded 3.9 percent in the second quarter from a year earlier, exceeding the 3.4 percent median forecast in a Bloomberg survey of 24 economists.
More: bloomberg.com
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``You are starting to see opinions that emerging
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