Brazilian stocks posted their biggest daily gain in almost a decade on Friday as optimism about a potential US debt rescue plan and measures to ban short selling boosted global markets. The benchmark Bovespa index of the Sao Paulo Stock Exchange jumped 9.57 percent to 53,055.38 - its biggest daily gain since January 1999.
"The plan gives an important signal. The measure goes against the playbook of economic liberalism, but now there is no other alternative. The price is high, but worthwhile," said Mariana Costa chief-economist at Link Brokerage. The Bovespa is still down nearly 17 percent this year.
All stocks in the index gained, led by an 8.6 percent jump in oil company Petrobras, a 6.5 percent gain in mining company Vale and a broad-based surge in financial services stocks. On the stock exchange, state-run Petrobras, the top-weighted stock in the Bovespa index, gained 8.6 percent to 34.98 reais, also getting a boost from more than 6 percent rally in crude prices.
Mining giant Vale climbed 6.5 percent to 36.84 reais as copper prices rallied nearly 4 percent and industrial metals such as nickel and zinc also gained sharply. Brazilian financial services stocks surged as investors snapped up shares of banks and securities firms around the world.
Shares of BM&F Bovespa, which operates Brazil's stocks and derivatives exchanges, jumped 15.9 percent to 9.10 reais. Unibanco gained 9.5 percent to 20.14 reais, while Bradesco, Brazil's largest private sector bank, was up 7.4 percent to 30.40 reais and Itau rose 8.5 percent to 32.00 reais.
Brazil's currency posted its biggest gain since August 2002, rallying 5 percent after the central bank sold $500 million in dollar repurchase agreements to supply the market with liquidity. The real closed up 4.74 percent at 1.83 per dollar.