Brazilian stocks, real rally as commodities surge

By Guillermo Parra-Bernal and Luciana Lopez

SAO PAULO, June 10 (Reuters) - Brazilian stocks advanced on Wednesday as commodities rallied and the dollar fell in international markets on hopes of a rapid global economic recovery.

Strong readings of property sales in China and consumer confidence in Australia boosted investor confidence that Brazilian exports of raw materials will pick up in coming months, said Vinicius Silva, an emerging markets equity strategist with Morgan Stanley.

The benchmark Bovespa index .BVSP jumped 1.2 percent to 53,783.82 points, its biggest intraday jump since May 6. Shares of Petrobras (PETR4.SA) and Vale (VALE5.SA), the index's two biggest stocks, led the Bovespa higher as oil CLc1 rose 1.5 percent in New York and metal prices gained.

"We have additional evidence that the global economic cycle is recovering at a pace that continues to surprise expectations," New York-based Silva said.

A weaker dollar helped push crude oil futures up more than $1 a barrel to top $71, a new seven-month high, after data Tuesday showed a steep drop in U.S. crude inventories. Gold GCM9, the metal seen as a natural hedge against a drop in the dollar, gained 0.8 percent.

The real (BRBY), Brazil's currency, advanced for a second day, gaining 0.3 percent to 1.932 reais to the dollar. It has risen about 21 percent so far this year.

"Global markets are beginning to shift focus and are beginning to see the recovery is underway. It is a sign of higher confidence," said Francisco Carvalho, head of currency trading at Liquidez Corretora in Sao Paulo. Liquidez is Brazil's biggest currency broker.

VALE, PETROBRAS

Morgan Stanley's Silva said he is confident the local equity markets might be able to sustain recent gains as consumer demand recovers and that company fundamentals will remain solid for the long term.

The Bovespa's futures contract due at the end of June INDM09 rose 1.5 percent to 54,050 points.

Liquidez's Carvalho said the real might gain to 1.92 reais before the end of the month as foreign investors snap up at least 50 percent of the $3.7 billion initial public offering of VisaNet, the Brazilian affiliate of credit card network Visa Inc (V.N). The transaction may take place by June 26.

More than $11 billion has flowed into the Brazilian markets this year, with more than half of it funneled into stocks. The Bovespa index has soared 49 percent since its March 2 low.

Petrobras, the state-controlled oil company, gained 1.3 percent to 33.93 reais as oil rose and news that the expected launch of a congressional probe into the company's management was delayed again until next week.

Vale, the world's largest iron-ore miner, rose 1.6 percent to 33.62 reais after the company secured on Wednesday a reduction in ore and pellet prices from steelmakers -- four Japanese and one South Korean.

Gerdau (GGBR4.SA) rose after JPMorgan Chase & Co analysts said in a report distributed on Tuesday that the company is making headway in its cost-cutting plans and is well-positioned to benefit from a quick recovery in the global economy.

Yields on interest-rate futures contracts <0#DIJ:> declined after posting their biggest increases in eight weeks on Tuesday. Traders said the central bank is likely to lower the benchmark Selic rate by a median 75 basis points when its monetary policy meeting concludes later on Wednesday. (Editing by Padraic Cassidy)