BRAZIL: Ibovespa Rises For The 11th Consecutive Session

(RTTNews) - After trading slightly lower early Monday, the Ibovespa rose at the end of the day and ended 0.39% higher at 79,378.54 points, a new settlement record. It was also the 11th consecutive day of positive performance for the main Brazilian stock market index.

The late boost to Ibovespa came from the Brazilian Finance Minister, Henrique Meirelles. He denied that the government would change the so-called "golden rule" of public accounts, which forbids the federal government from taking loans to finance operating expenses. According to the current Brazilian law, only investments and debt refinancing can be funded by new debt.

There were rumors that the government would change the "golden rule" temporarily to avoid breaking the law, and that news raised concerns about a potential sovereign rating downgrade.

Meirelles, however, ruled out changes and reinforced pension reform as a way out of the current fiscal deficits.

"Meirelles has played a very important role. He is the protagonist of this scenario," said Leonardo Ramos, a partner at DNAInvest.

He added that better economic data, bets on the Congressional approval of the pension reform, and expectations that former Brazilian president Luiz Inácio Lula da Silva would lose a trial later this month - potentially being blocked of running in this year's election - also helped the Ibovespa move higher.

Shares of Vale (+2.22%) and steelmakers, such as CSN (+4.85%) and Gerdau (+3.49%), had the best performance, boosted by steel price increases in Brazil and higher iron ore prices abroad.

Meanwhile, the locally traded U.S. dollar rose against the Brazilian real for the first time this year. The greenback gained 0.12%, quoted at R$ 3,238. Statements by Meirelles and Dyogo Oliveira (Planning Minister) on the "golden rule" also affected the foreign exchange trading in Brazil.

For the next few days, while warning of a possible drop after 11 days of bullishness, analysts have remained optimistic.

"The market does not find a seller. The level of stock market volatility is low. I think the fall is not yet", Ramos said.