Brazil stocks ease, currency rallies on China

SAO PAULO, Brazil, Sept 11 (Reuters) - Brazil's stocks fell in early trading on Friday as optimism over strong second-quarter economic growth was offset by profit-taking, while the national currency gained against the U.S. dollar.

The benchmark Bovespa index .BVSP fell 0.31 percent to 58,225.19 points, its first fall after five consecutive days of gains.

The index has rallied more than 55 percent so far this year on a widespread view that Latin America's largest economy has left the recession behind.

Second-quarter gross domestic product grew 1.9 percent from the previous quarter, official data showed on Friday, confirming that Brazil's economy has returned to growth.

"That added a boost because it came in above expectations," said a trader of a large Sao Paulo brokerage, who asked not to be named.

Finance Minister Guido Mantega said he expected GDP growth of 2 to 3 percent in the third quarter.

Forecasts that China's economy would grow by 8 percent this year also buoyed the Ibovespa. The Asian giant became Brazil's main export market this year.

Brazil's real BRBY currency strengthened as much as 0.8 percent to 1.806 reais per dollar, as the greenback lost ground against a basket of currencies on optimism over the Chinese economy.

"China surprised with better numbers than expected, underscoring expectations it will lead the recovery of the world economy," said Miriam Tavares, currency director at brokerage AGK Corretora.

The real matched levels last seen in September 2008.

Still, investors took profits on the two heaviest-weighted companies in the Ibovespa, state-controlled energy giant Petrobras (PETR4.SA), and mining giant Vale (VALE5.SA).

Petrobras shares fell 0.54 percent to 33.16 reais as U.S. crude prices CLc1 edged 0.98 percent higher to 71.01.

Mining company Vale, the world's largest producer of iron ore, fell 0.61 percent to 34.33 reais.

INFLATION PROSPECTS

Brazilian interest rate futures contracts <0#DIJ:> were mixed on Friday after data on Thursday showed slower inflation and the central bank signaled a gradual economic recovery. (Editing by Dan Grebler)