Brazil's Vale leads stocks higher, real gains

SAO PAULO, May 15 (Reuters) - Brazilian stocks rallied nearly 1 percent on Thursday led by mining company Vale, which benefited from higher copper and industrial metals prices, while the national currency firmed on dollar inflows to local capital markets.

The Bovespa index .BVSP of the Sao Paulo stock exchange rose 0.9 percent to 70,656.73 points, recovering from a 0.68 percent slide the previous session. Shares of state-controlled oil company Petrobras also gained as crude prices rose near $126 a barrel.

The Brazilian real BRBY, firmed 0.3 percent to 1.658 per U.S. dollar on thin trading.

The real has benefited from dollar inflows the past days, said Jose Roberto Carreira, manager of currency trading at the Fair brokerage.

Interest-rate futures <0#DIJ:> on the BM&F commodities and futures exchange in Sao Paulo were mostly lower on expectations government tax breaks for the wheat sector announced late on Wednesday may help avert a surge in prices of bread and pasta that would stoke inflation.

At the stock exchange, Vale (VALE5.SA: Quote, Profile, Research) -- the second heaviest weighted stock in the Bovespa index after state-run oil company Petrobras -- rose 1.61 percent to 56.14 reais, benefiting from a 2 percent surge in copper prices and gains in other industrial metals.

State controlled oil company Petrobras (PETR4.SA: Quote, Profile, Research) rose 0.5 percent to 46.53 reais, tracking gains of nearly 1 percent in crude prices.

Brazil's biggest beef producer JBS SA (JBSS3.SA: Quote, Profile, Research) slumped 2.38 percent to 7.37 reais after the company reported late on Wednesday a first-quarter net loss of 6.62 million reais, compared with net income of 10.64 million reais in the year-earlier period.

BM&F SA (BMEF3.SA: Quote, Profile, Research), the holding company for Brazil's commodities and futures exchange, fell 1.36 percent to 18.15 reais. The company late on Wednesday reported a first quarter net income of 79.94 million reais, 15.8 percent higher than in the fourth quarter of 2007. BM&F, which went public in November 2007, didn't publish data for the first quarter of last year. (Reporting by Elzio Barreto and Silvio Cascione, editing by Walker Simon)