Brazilian stocks jumped on Friday as Rio de Janeiro's successful 2016 Olympics bid boosted expectations for development in Latin America's largest economy.
Airlines were among the biggest gainers with investors seeing a potential increase in air traffic as Rio was set to become the first South American city to host the summer games.
Tam (TAMM4.SA) jumped 3.52 percent to 23.81 reais per share as rival GOL (GOLL4.SA) sprang 3.03 percent to 18.34 reais.
The benchmark Bovespa index .BVSP was up 1.18 percent to 61,171.99 after falling early due to profit-taking and investor wariness over disappointing payroll data in the United States.
"The rise in the index was 100 percent focused on the Olympics," said Luiz Eduardo, a trader at Banco Modal.
"A lot of infrastructure will have to be created," said Januario Hostin Jr, an analyst with Leme Investimentos. "There will need to be a series of public investments."
The 2016 Olympics victory also serves as an international signal that Brazil has progressed past economic turmoil, he added.
Brazilian airlines could have their earnings estimates upgraded by analysts on expectations of increased tourist inflows, as well car rental Localiza (RENT3.SA) and airport retail firm Dufry (DUFB11.SA), noted Ed Kuczma, an investment analyst with New York-based fund manager Van Eck Global.
Localiza added 6 percent to 18.55 reais, while Dufry rose 2.22 percent to 30.91 reais. Neither are part of the Bovespa index.
Other gainers on the Olympics news included real estate companies. Cyrela (CYRE3.SA) vaulted 4.72 percent to 23.30 reais and Gafisa (GFSA3.SA) rose 4.71 percent to 26.70 reais.
Steelmakers advanced on the hopes of construction projects stemming from the additions Brazil will need to make to host the games.
Gerdau (GGBR4.SA) advanced 3.25 percent to 23.86 reais, Usiminas (USIM5.SA) rose 1 percent to 46.30 reais and CSN (CSNA3.SA) gained 1.19 percent to 53.55 reais.
Brazil's currency, the real BRBY, firmed 0.45 percent to 1.779 per U.S. dollar in afternoon trading.
Rio and Madrid were the last two cities in contention to host the 2016 summer games after front-runner Chicago and Tokyo were knocked out in the first two rounds of voting.
While the ultimate economic benefits of the games are debated by economists the world over, the international competition typically boosts the prestige of host nations.
Yields on Brazilian interest rate futures contracts largely ticked downward.
The yield on the contract due January 2011 DIJF1 fell to 10.22 percent from 10.35 percent. The yield on the one due January 2012 DIJF2 fell to 11.36 percent from 11.55 percent. Those contracts were among the most highly-traded of the day. (Reporting by Luciana Lopez, Ana Nicolaci da Costa and Walter Brandimarte; Writing by Luciana Lopez; Editing by Kenneth Barry)
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Wow! The 2016 olympics in Rio de Janeiro is still far away and yet the economy is doing well already?
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