Bovespa in Biggest Weekly Gain Since February on Factory Data

Brazilian stocks climbed for a fourth day, headed to the biggest weekly advance since February, after industrial production data showed the economy remains robust and as U.S. unemployment fell to two-year low.

Petroleo Brasileiro SA, Brazil’s state-controlled oil company, advanced with crude prices. Banks rallied, with the MSCI Brazil/Financial Index advancing for a fourth day, on speculation interest rates will increase less than expected.

The Bovespa index gained 0.8 percent to 69,127.73 at 9:23 a.m. New York time. Sixty-four stocks climbed on the index, while three fell. The measure is up 2 percent this week, the biggest weekly gain since the five days ended Feb. 18. The real strengthened 0.7 percent to 1.6209 per U.S. dollar.

“We think the worst is over,” JPMorgan Chase & Co. analysts including Ben Laidler wrote in a note to clients dated yesterday. Financial stocks are “cheap,” said Laidler.

Brazilian stocks rose the highest level since January after industrial production rose at the fastest pace in 11 months in February. Output gained 1.9 percent from January and 6.9 percent from the same month a year earlier, the national statistics agency said today.

Economists surveyed by Bloomberg forecast a monthly gain of 0.9 percent and annual rise of 5.0 percent. February’s output results compare with January’s 0.2 percent monthly gain and 2.5 percent year-on-year rise.

U.S. Jobs

The U.S. economy added more jobs than forecast in March and the unemployment rate unexpectedly declined to a two-year low of 8.8 percent, a sign the labor-market recovery is gathering speed. Payrolls increased by 216,000 workers last month after a revised 194,000 gain the prior month, the Labor Department said today in Washington. Economists projected a March gain of 190,000, according to the median estimate in a Bloomberg News survey.

Oil rose to a 30-month high in New York as economic data from China spurred hope of growing demand in the world’s biggest energy user and fighting in Libya fanned concern that output cuts may spread to Middle East producers.

Brazilian central bank said Mar. 30 it will postpone a plan to bring inflation down to a 4.5 percent target until 2012. Policy makers said the costs of meeting that goal through interest rate increases this year would be too high, spurring speculation borrowing costs will rise less than expected.

Petroleo Brasileiro climbed 0.4 percent to 28.62 reais.

The 12-member MSCI Brazil/Financials Index gained 1.7 percent. It has advanced 9 percent for the last three days, the most since July 8.

The Bovespa fell 1 percent this year through yesterday as homebuilders and banks fell on concern faster inflation will limit growth, outweighing gains in oil and steel producers. The index trades at 10.7 times analysts’ earnings estimates, according to weekly data compiled by Bloomberg. That compares to a ratio of 14 for the Shanghai Composite Index, 7.5 for Russia’s Micex, and 17.8 for India’s Sensex.