Brazil stocks rise in choppy trade, currency firms

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SAO PAULO Jan 26 (Reuters) - Brazilian stocks rose on Monday in choppy trade helped by commodity and bank shares, while the national currency charged higher as investors dumped the U.S. dollar around the world.

The Bovespa index .BVSP of the Sao Paulo stock exchange closed 0.99 percent higher at 38,509.45, rising for a second session after a 0.6 percent gain on Friday.

Brazil's currency, the real BRBY, strengthened 1.07 percent to 2.314 reais per U.S. dollar, benefiting from a rally in global markets. The greenback plunged 1.3 percent against a basket of major currencies .DXY as risk aversion faded and investors sold dollars for higher-yielding currencies.

"The international market is having a lot to with that," said Mario Battistel, head of currency trading at brokerage Fair in Sao Paulo.

Interest rate futures <0#DIJ:> closed higher across the curve, correcting some of the strong adjustments made last week, when the central bank cut its benchmark interest rate by one percentage point to 12.75 percent, investors said.

A weekly central bank survey released on Monday showed economists forecast the benchmark Selic rate at 11 percent in December, down from an estimate of 11.25 percent a week earlier.

On the stock exchange, investors started the day on the sidelines, but with positive signs from overseas markets buy orders started to be seen, especially for Brazilian commodity and banking shares.

Miner Vale (VALE5.SA), the world's largest producer of iron ore, jumped 2.5 percent to 26.95 reais as copper prices surged 6.7 percent after news that U.S. home sales grew in December.

State-run energy company Petrobras (PETR4.SA), the heaviest weighted stock in the Bovespa index, rose 0.9 percent to 23.8 reais, bucking the decline in crude prices as investors snapped up widely traded Brazilian companies.

The banking sector was also up, with Banco do Brasil (BBAS3.SA) leading the gains with a 6.1 percent surge to end at 14.11 reais.

The state-run bank said on Friday it will book an additional net gain of 2.5 billion reais ($1.08 billion) in the fourth quarter due to a revision of assets and liabilities.

Gains from financials in Europe, where British Bank Barclays (BARC.L) had a 73-percent surge, also boosted Brazilian banking stocks, investors said. (Reporting by Renato Andrade and Jenifer Correa; Editing by James Dalgleish)