The Brazilian stocks strengthened on Friday on signs the government may act to improve its fiscal position, while a modest interest rate rise late Wednesday buoyed expectations Brazil may enter a period of sustainable economic growth.
The benchmark Bovespa index of the Sao Paulo Stock Exchange was 0.5 percent higher at 22,990 points after briefly hitting 23,000.
Individual stocks were mixed, but bellwether stock Tele Norte Leste Participacoes was 1.17 percent up at 39.30 reais.
"People are really animated about the government wanting to raise the primary surplus.
This is a really important demonstration of austerity and could mean that the central bank would have to raise interest rates less," said Jorge Kattar, a derivatives traders at Rabobank in Sao Paulo.
Local media reported on Thursday that Finance Minister Antonio Palocci is considering formally raising the government's primary surplus target to about 5.0 percent of gross domestic product from the current 4.25 percent.
The budget surplus in the first half of the year, excluding interest payments on government debt, was 5.6 percent of GDP.
If raised, the target would help lower Brazil's debt-to-GDP ratio of about 56 percent and cut long-term interest rates.
The local currency, the real, was trading at 2.882 reais per US dollar about two hours after opening, compared with 2.885 at Thursday's close.
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