Brazil stocks rise on China imports, real weaker

SAO PAULO Jan 11 (Reuters) - Brazilian stocks rose in early trading on Monday in line with global markets as surging Chinese raw materials imports fed investor optimism about a global economic recovery.

Brazil's benchmark Bovespa index .BVSP added 0.84 percent to 70,851.18 in morning trade, picking up after two straight sessions of light losses.

Over the weekend China reported that it ended 2009 with record monthly imports of crude oil and soybeans and strong iron ore and copper appetite. [ID:nSGE60A01E]

That's especially good news for Brazil, which has seen trade with China jump over the past year.

China's voracious appetite for commodities has helped pull up the Bovespa index, which includes a number of stocks tied to the trade in raw materials.

"Without a doubt, the Chinese data benefits Brazil," said Marianna Costa, an economist with Link Investimentos in Sao Paulo.

Last week's disappointing payrolls data in the United States continue to have an impact, as well, she said.

The unexpected shedding of 85,000 U.S. jobs in December suggest that near-zero interest rates could persist for longer than expected in the world's largest economy, Costa noted. [ID:nN07203048]

Those ultra-low rates have helped feed the carry trade, in which investors borrow money at low costs in one country and then invest in nations with higher yields, such as Brazil.

While the Bovespa index posted hefty gains of about 83 percent in 2009, Costa said, she still sees space for gains of about 15 to 20 percent in 2010.

Brazil's currency, the real BRBY, weakened 0.17 percent to 1.733 per dollar on Monday, even as the greenback slumped against a basket of major currencies .DXY.

The weaker dollar pushed commodities higher, with the Reuters-Jefferies index .CRB rising 0.57 percent.

Within the Bovespa index, gains were led by index heavyweights Vale and Petrobras.

Mining company Vale (VALE5.SA), the world's largest producer of iron ore, climbed 1.03 percent to 46.02 reais.

State-controlled energy giant Petrobras (PETR4.SA) advanced 0.73 percent to 37.22 reais. Crude oil CLc1 hit a 15-month high on China and the weaker dollar. [ID:nSGE60A05G]

Steelmakers also rose in early trade. Gerdau (GGBR4.SA) moved up 1.32 percent to 29.93 reais, Usiminas (USIM5.SA) rose 0.69 percent to 51.20 reais and CSN (CSNA3.SA) added 1.5 percent to 58.33 reais.

Brazilian interest rate futures contracts <0#DIJ:> were mixed, with a number of contracts ticking higher or remaining flat.

The yield on the contract due January 2011 DIJF1 edged to 10.34 percent from 10.31 percent. The yield on the contract due January 2012 DIJF2 inched to 11.74 percent from 11.71 percent.

Both were among the morning's most active contracts.

Investors use the instruments to bet on trends in the country's benchmark interest rate, called the Selic, currently at a record-low 8.75 percent. (Reporting by Luciana Lopez; Editing by Andrea Ricci)