Brazil stocks rise on commodities, weaker dollar

SAO PAULO Oct 8 (Reuters) - Brazilian stocks rose in early trading on Thursday as the dollar's weakness helped push commodities and emerging market assets higher.

The benchmark Bovespa index .BVSP rose 0.86 percent to 63,179.85 in morning trading, at one point testing the current intraday high for the year. The index had dipped slightly on Wednesday on light profit-taking.

Brazil's currency, the real BRBY, strengthened 0.28 percent to 1.751 per dollar as the greenback fell against a basket of major currencies .DXY.

A Reuters poll showed that the real is expected to remain firm against the greenback well into 2010. [ID:nN07480911].

"The devaluation of the dollar is pushing commodities and emerging stocks," said Marcelo Portilho, a strategist with CM Capital Markets.

The 19-commodity Reuters-Jefferies index .CRB rose 0.15 percent as crude oil CLc1 added 0.3 percent on choppy trading.

The Bovespa index includes a number of heavyweight stocks tied to commodities, including state-controlled energy giant Petrobras (PETR4.SA) and mining company Vale (VALE5.SA), the two most heavily-weighted stocks in the index.

Petrobras rose 0.55 percent to 34.85 in early trading.

Vale, the world's largest producer of iron ore, added 0.84 percent to 38.31 reais.

Banks also gained. Itau Unibanco (ITUB4.SA) rose 0.71 percent to 35.30 reais, Banco do Brasil (BBAS3.SA), Latin America's largest bank by assets, climbed 1.41 percent to 30.12 reais and Bradesco (BBDC4.SA) advanced 1.04 percent to 35.03 reais.

Steelmakers, which often move in line with hopes for an economic recovery, advanced on Thursday. Gerdau (GGBR4.SA) rose 0.83 percent to 25.66 reais, Usiminas (USIM5.SA) added 0.46 percent to 47.72 reais and CSN (CSNA3.SA) moved 0.81 percent higher to 56.20 reais.

Yields on Brazilian interest rate futures contracts <0#DIJ:> were mixed, although longer-term contracts ticked slightly higher.

The yield on the contract due January 2011 DIJF1 rose to 10.39 percent from 10.37 percent. The yield on the contract due January 2012 DIJF2 rose to 11.39 percent from 11.38 percent.

The two were among the most highly-traded contracts of the morning.

September inflation quickened over August, though annual inflation remained within the government target, new data showed on Thursday. [ID:nN08515494]