RIO DE JANEIRO, April 22 (Reuters) - Iron ore miner Vale SA drove Brazil's stock market higher on Wednesday, offsetting a decline in shares of state-run oil company Petrobras, which is expected to release its long-delayed financial statements.
Brazil's benchmark Bovespa index rose 1.1 percent as traders returned from a national holiday that shut Brazilian markets on Tuesday.
Shares of Vale jumped 8.2 percent after the world's largest iron ore producer posted a 4.9 percent year-on-year increase in production and spot prices rallied .
On the flip side, shares in Petrobras fell by as much as 3.3 percent, as investors pocketed some of the recent gains fueled by hopes that the firm will leave behind the worst of a corruption scandal when it posts its earnings.
The state-run oil company's shares later trimmed losses to a modest 0.3 percent drop. Petrobras shares have rallied more than 50 percent since mid-March.
Expectations that the release of Petrobras earnings would reduce uncertainty related to the corruption scandal's impact on Brazil's economy also supported the currency, the real, which gained 0.5 percent.
Economists with Nomura Securities warned, however, that the positive impact of the earnings release has been "largely priced" into the real and that the currency could soon sell off.
"We believe the market will move in a classic 'buy the rumor-sell the fact' dynamic," they said in a note to clients. "In a more extreme (and unlikely) scenario of no statements being released, the price action against the real could be extremely negative." Moody's Investors Service said on Tuesday the release of Petrobras' financial statements will also likely end the chance of forced early repayment of up to $110 billion in debt.
Key Latin American stock indexes and currencies at 1630 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 1,047.08 0.47 8.98 MSCI LatAm 2,636.93 0.54 -3.84 Brazil Bovespa 54,360.23 1.11 8.70 Mexico IPC 45,153.05 -0.32 4.65 Chile IPSA 4,029.92 -0.15 4.65 Chile IGPA 19,548.87 -0.14 3.60 Argentina MerVal 11,588.09 2.58 35.07 Colombia IGBC 10,290.78 0.7 -11.55 Peru IGRA 13,010.16 0.33 -12.06 Venezuela IBC 5,689.36 0 47.44 Currencies Latest Daily YTD pct pct change change Brazil real 3.0085 0.54 -11.67 Mexico peso 15.4319 0.02 -4.46 Chile peso 619 -0.53 -2.04 Colombia peso 2,489.99 -0.76 -4.10 Peru sol 3.133 -0.06 -4.92 Argentina 8.8750 0.00 -3.66 peso(interbank) Argentina peso 12.68 0.24 10.41 (parallel) (Reporting by Walter Brandimarte, editing by G Crosse)