Brazilian stocks log win after string of losses

LOS ANGELES (MarketWatch) � Brazilian stocks jumped Thursday, with market players picking up bargains following a string of losses that put the equity benchmark on the path toward another weekly decline.

Following three straight losing sessions, Brazil�s Ibovespa BR:BVSP �rose 2.9% to 63,058.00 as home building, retail and most mining stocks moved higher. The Ibovespa is still facing a weekly loss of about 1%, which would be the benchmark�s fourth consecutive week of declines.

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Vale, the world�s largest iron ore miner, was among the top advancers Thursday as its preferred shares BR:VALE5 �leapt 6.1%.

U.S.-listed shares of Vale VALE surged 6.4%, rising alongside other metals and mining issues that were among strongest gainers on Wall Street�s S&P 500 Index SPX �.

An executive at The Steel Index, a provider of steel and iron ore prices, told Dow Jones Newswires that an expected slowdown in Chinese first-quarter growth isn�t hitting the iron-ore market. Read more about Chinese demand for iron ore.

The U.S. and Brazilian equity markets on Thursday appeared to have found support from an improving outlook on China, the world�s second-largest economy and Brazil�s biggest trading partner.

China�s central bank said Thursday that banks made more than 1 trillion yuan in new loans last month, well above the 800 billion yuan of credit expected in a Reuters survey. Regulators are believed to watch and control loan disbursals to steer the economy.

Separately, the World Bank said in a quarterly update that risks of economic overheating in China �are moderating, increasing the prospects to achieve a soft landing.�

The World Bank cut its 2012 growth forecast for China to 8.2% from a previous estimate of 8.4%. The Washington-based group said China should work against a hard landing through fiscal policies aimed at supporting consumption. Cutting reserve requirements for banks would be one way to ease credit availability, the group said.

The Brazilian government has been pushing private banks in Brazil to reduce borrowing costs as it tries to accelerate economic growth. A banking federation in Brazil has given the government some proposals aimed at cutting costs. Read about cost-cutting proposals by Brazilian private banks.

Brazil�s economy expanded by 2.7% in 2011, sharply decelerating from the robust rate of 7.5% in 2010.

Banking stocks, which have been under pressure recently, gained in Sao Paulo trading Thursday. Shares of Ita� Unibanco ITUB �BR:ITUB4 �bounced 3.8% higher. The stock had finished lower in the previous six sessions. Banco Bradesco BR:BBDC4 �shares rose 2.1% and Banco Santander Brasil BR:SANB11 �traded up 4.8%. Stock in state-run Banco do Brasil BR:BBAS3 �advanced 2.4%.

Moody�s Investors Service on Thursday said the outlook for Brazil�s banking system �remains stable,� with declining interest rates, low unemployment and real wage gains contributing to �strong financial metrics� for Brazilian banks and the creation of �opportunities for earnings generation,� said Moody�s analyst Ceres Lisboa in a statement.

The outlook reflects expectations of supportive credit conditions in the Brazilian system over the next 12 to 18 months.

Further deterioration is expected in specific asset classes �given that the domestic and global slowdown could negatively affect business performance,� said Moody�s analyst Ricardo Kovacs, who co-wrote the report on Brazil�s banking system. �Nonetheless, we do not expect system-wide distress during the outlook period.�

Elsewhere, Mexico�s IPC MX:IPC �rose 0.5% to 39,357.81. Chile�s IPSA CL:IPSA �ended nearly 0.1% higher at 4,549.72 and Argentina�s Merval AR:MERV �advanced 2.4% to 2,562.68.