Brazil stocks hit 1-month high on Vale, real gains

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SAO PAULO, Feb 18 (Reuters) - Brazil's stock market rose to its highest level in more than a month on Monday, led by a jump in miner Vale after the company said it secured a 65 to 71 percent iron ore price increase with Asian steelmakers.

The Bovespa index .BVSP of the Sao Paulo Stock Exchange rose 2.5 percent to 62,801.43 points, the highest close since ending on Jan. 10 at 63,515. Vale's shares surged 5.08 percent, while stock in steelmaker CSN, which has its own iron ore mine, also rose because of the expected gains in profit margins from higher metals prices.

"This news on Vale cheered up the markets," said Joao Medeiros, a partner at the Pioneer brokerage in Sao Paulo.

Brazil's currency, the real BRBY<BRL=>, strengthened 0.97 percent to 1.737 per U.S. dollar on growing investment flows to the country.

Interest-rate futures <0#DIJ:> on the BM&F commodities and futures exchange in Sao Paulo fell, reflecting the positive investor sentiment.

On the stock market, mining giant Vale (VALE5.SA: Quote, Profile, Research), the second most widely traded stock in Brazil, rose 5.08 percent to 48.86 reais, after trading as high as 49.40 reais. Vale said iron ore price increases to five Japanese steel companies and South Korea's POSCO reflect "the continuity of very tight conditions still prevailing in the global iron ore market."

Steelmaker CSN (CSNA3.SA: Quote, Profile, Research) rose 3.58 percent to 63.70 reais. The company, which is fully supplied by its own Casa de Pedra mine, sells excess iron ore in foreign markets at current prices and benefits from the surge in the commodity.

State-controlled oil company Petrobras (PETR4.SA: Quote, Profile, Research), the heaviest weighted stock in the Bovespa index, rose 2.60 percent to 84.95 reais. (Reporting by Elzio Barreto and Fabio Gehrke; Editing by Dan Grebler)