By Jeffrey T. Lewis
SÃO PAULO--Vale shares rose 3.9% and Companhia Siderurgica Nacional shares advanced 3.2% after China's central bank announced a new measure to boost economic growth.
Vale shared reached 69.98 reais, the equivalent of $14.36, and were down 24% from the end of last year through Wednesday's close. Companhia Siderurgica, or CSN, shares rose to BRL12.44. Brazil's benchmark Ibovespa stocks index was up 0.8% in midday trading.
The People's Bank of China on Thursday cut banks' reserves requirement ratio by a quarter of a percentage point, a move that will free up tens of billions of dollars for banks to lend and help spur economic growth. The decision is boosting Vale's and CSN's shares Thursday, said Bruno Komura, an equities analyst at Ouro Preto Investimentos.
Faster economic growth in China increases demand for steel, and for its main ingredient, iron ore, and miners Vale and CSN stand to gain from that increased demand. JP Morgan analysts Rodolfo Angele and Tathiane Martins Candini raised their forecasts for iron-ore prices for this year and next year, and said Vale is a top pick in the sector.
Write to Jeffrey T. Lewis at email@example.com
(END) Dow Jones Newswires