Brazil markets edge higher ahead of Fed statement

SAO PAULO Dec 16 (Reuters) - Brazilian stocks rose slightly in early afternoon trading on Wednesday as investors took a wait-and-see approach over U.S. interest rates.

Brazil's Bovespa index .BVSP added 0.09 percent to 69,372.76, edging closer toward the 70,000-point mark. The index has pushed up against that level -- not attained since June 2008 -- several times this week.

Wariness over what U.S. Federal Reserve policymakers might say in an afternoon statement kept the rise in check, said Daniella Marques, a partner at Oren Investimentos.

Near-zero interest rates in the United States have pushed Brazilian stocks higher this year, as investors abroad borrow money in lower-cost areas to invest in higher-yielding emerging market assets.

That so-called carry trade has helped the Bovespa gain nearly 85 percent so far this year through Tuesday's close. Because the United States is the world's largest economy, decisions there also have a global effect.

The Fed is expected to keep rates unchanged at a range of 0 to 0.25 percent later in the day, with a statement at the close of their meeting expected around 1915 GMT. For more see [ID:nN15246231].

"Depending on what's in the statement, it could catalyze profit-taking," Marques said.

The expiration of options contracts on Wednesday affected volatility, said Andre Hanna Farath, an analyst at brokerage Interfloat.

"There's always a drop in volume," he said.

Brazil's currency, the real BRBY, firmed 0.23 percent to 1.75 per U.S. dollar.

Within the Bovespa index, state-controlled energy company Petrobras (PETR4.SA), the most heavily weighted stock, led gains. Those shares rose 0.21 percent to 38.08 reais as crude oil CLc1 rose 1.4 percent on expectations that U.S. inventories likely fell last week.

Airlines rose. TAM Linhas Aereas (TAMM4.SA), Brazil's biggest airline, put on 6.31 percent to 38.26 reais and rival Gol (GOLL4.SA) advanced 3.19 percent to 26.52 reais.

TAM said on Wednesday it plans to spin off its Multiplus SA unit in an initial public offering.

Processed foods maker Brasil Foods (BRFS3.SA) climbed 2.37 percent to 42.78 reais. Itau Securities upgraded the stock to outperform in a report dated Tuesday, saying that there is strong upside potential and that the share price is already reflecting most of a weak operational outlook.

Yields on interest rate futures contracts <0#DIJ:> largely ticked higher after a government report showed farmers, manufacturers and services companies added jobs for a 10th month in a row in November.

The report added to worries that slack in the economy is tightening ahead of a possible uptick in inflationary pressures. [ID:nN16130529]

The yield on the contract due January 2011 DIJF1 ticked up to 10.47 percent from 10.42 percent. The yield on the contract due July 2010 DIJN0 edged up to 9.2 percent from 9.18 percent.

Investors use the contracts to bet on trends in the country's benchmark interest rate, the Selic, currently at a record-low 8.75 percent.

Policymakers use an inflation target as a guide when setting interest rates. Faster inflation could spur the central bank to hike rates sooner than expected. (Reporting by Luciana Lopez; Editing by James Dalgleish)