Steel Cos Drag Brazil Stock Index From Bigger Gains

If not for underperforming steel and metals companies, Brazil's Ibovespa stock index would be registering bigger gains.

Major steel and metals companies are trading at a loss on the day, while the Ibovespa is trying to inch ahead of recent gains of 0.47% after being down all day.

Iron ore exporter Vale do Rio Doce (RIO) is off 0.4% to 29.57 Brazilian reals ($13.39) per share. Steel companies Gerdau (GGB) and Companhia Siderurgica Nacional (SID) are both around 0.26% lower. Usiminas (USIM5.BR) is 0.94% lower to BRL31.58 per share.

Once Vale shares turn positive, then Ibovespa shares will likely extend their gains. The index is heavily weighted towards metals and oil company Petrobras (PBR), which is up 0.63% to BRL28.88.

The Ibovespa index has been trading negative all day based on investor wariness over the swine flu. But news of better than expected U.S. consumer confidence has brought investors back into one of the most popular emerging markets around.

In New York, investors and fund managers were already pouring money into Brazilian assets. The iShares MSCI Brazil exchange traded fund (EWZ) was up 2.03% at 1941 GMT to $43.83 per share as investors regain confidence in Brazilian assets.

-By Kenneth Rapoza, Dow Jones Newswires, 5511-2847-4541, [e-mail]