Brazil markets close up on recovery hopes, real up

SAO PAULO Aug 12 (Reuters) - Brazilian stocks closed higher on Wednesday, their biggest one-day jump since Aug. 3, as the U.S. central bank heartened investor hopes of a global economic recovery.

The benchmark Bovespa index .BVSP ended the day 1.48 percent higher to 56,588.26, after a morning spent partly in negative territory.

Brazil's currency, the real BRBY, strengthened 0.49 percent to 1.834 reais per dollar. The real has gained about 27 percent this year.

The gains came as the U.S. Federal Reserve said the world's largest economy was leveling out, with improved conditions in financial markets. Fed policymakers kept interest rates near zero as they closed a two-day meeting on Wednesday.

"There's more optimism but an understanding that the pace (of recovery) is slow," said Jose Francisco de Lima Goncalves, chief economist with Banco Fator, noting the Fed's tone of extreme caution.

Because of the size of the U.S. economy, decisions taken there reverberate throughout the world, including in Brazil.

State-controlled energy giant Petrobras (PETR4.SA) added 2.15 percent to 31.89 reais as crude oil CLc1 rose 1.02 percent, tracking gains in U.S. equities.

Mining company Vale (VALE5.SA), the world's largest iron ore producer, advanced 0.87 percent to 32.62 reais.

Petrobras and Vale have the heaviest weighting in the Bovespa index.

Airliner Gol (GOLL4.SA) soared 12.58 percent to 17.90 reais as the country's second-largest airline posted late on Tuesday its second straight profit in seven quarters, citing lower fuel and repair expenses and lower debt-servicing costs thanks to a stronger real. [ID:nN11522959]

"The tendency is for the Bovespa to stay positive," said Max Bueno, an analyst with Spinelli Corretora. "Corporate results have lately pleased investors," with a few exceptions.

Limiting gains was Itau Unibanco (ITUB4.SA), Latin America's largest bank by assets. The stock shed 0.75 percent to 34.34 reais, one day after the bank announced a drop in second-quarter recurring profit on increased provisions for bad debts. [ID:nN11507002]

The 19-commodity Reuters-Jefferies index .CRB added 1.06 percent. The Bovespa index includes a number of stocks tied to commodities.

YIELDS FALL

Yields on Brazilian interest rate futures contracts <0#DIJ:> largely slid, as the move by U.S. policymakers not to raise interest rates cooled concerns among Brazilian investors of rising rates here.

"That's one less reason to have higher rates here soon," Goncalves said.

The Fed extended the time-frame but not the size of a long-term government securities purchasing program through October, making it unlikely the U.S. government will raise interest rates in 2009, Goncalves said.

The yield on the contract due January 2011 DIJF1 fell to 9.79 percent from 9.83 percent. The yield on the contract due January 2010 DIJF0 dipped to 8.64 percent from 8.65 percent.

The two were among the day's most highly-traded contracts. (Reporting by Luciana Lopez; Editing by Kenneth Barry)