Brazil stocks rise on commodities, China demand

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SAO PAULO, March 10 (Reuters) - Brazilian stocks rallied for a second day on Wednesday, pulled up by steelmakers, banks and commodities heavyweights, as imports in China jumped.

Chinese imports grew faster than expected in February, underlining the momentum behind the world's third-largest economy. For more see [ID:nSGE6290A5].

Last year China became Brazil's largest trading partner, underscoring its importance to Latin America's largest economy.

Brazil's benchmark Bovespa stock index .BVSP jumped 1.1 percent to 70,306.65, extending the previous session's 1.46 percent advance.

Brazil's currency, the real BRBY, strengthened 0.79 percent to 1.767 per U.S. dollar.

Leading gains in the Bovespa were shares of state-controlled oil company Petrobras (PETR4.SA), which rose 1.6 percent to 37.07 reais after oil CLc1 rallied 1.6 percent in global markets.

Among banks, Itau Unibanco (ITUB4.SA), Brazil's largest private sector bank, moved up 2 percent to 38.52 reais, Bradesco (BBDC4.SA) put on 1.7 percent to 32.40 reais and Banco do Brasil (BBAS3.SA) climbed nearly 1 percent to 30.19 reais.

CSN (CSNA3.SA) rose for a 10th day, adding 2.2 percent to 67.86 reais. On Tuesday, Brazil's biggest diversified steelmaking group said it would start spinning off its main business divisions with an initial public offering of its iron ore unit. [ID:nN09229047]

Fellow steelmakers Gerdau (GGBR4.SA) added 1.2 percent to 27.93 reais and Usiminas (USIM5.SA) 1.4 percent up to 57.40.

YIELDS RISE

Yields on Brazilian interest rate futures contracts <0#DIJ:> inched higher in early trading after the country's broadest inflation index rose more than expected in a March preview reading and speculation mounted that central bank president Henrique Meirelles will step down before the end of the month.

The yield on the contract due April 2010 DIJJ0, the most widely traded in Sao Paulo on Wednesday, ticked to 8.768 percent from 8.751 percent. The yield on the contract due Jan. 2011 DIJF1 edged to 10.43 percent from 10.42 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.

Meirelles, Brazil's longest-serving central bank chief, will step down this month even though his political future remains undecided, IstoE Dinheiro magazine reported on its Website, without citing a source. [ID:nN10117215]

The central bank declined to comment on the report.

Meirelles must leave his post by April 3 should he decide to run for public office, such as a seat in the Senate, in Oct. 3 general elections. [ID:nN19113355] (Reporting by Luciana Lopez; Additional reporting by Vanessa Stelzer and Natuza Nery; Editing by James Dalgleish)