The Ibovespa rebounded from the lowest level in two weeks as Vale SA jumped amid a rally in iron-ore prices.

Pulp producer Fibria Celulose SA snapped a three-day rout. Natura Cosmeticos SA paced losses among companies which depend on domestic demand after Brazil’s central bank cut its economic growth forecast for 2014.

The Ibovespa rose 0.2 percent to 53,506.75 at the close of trading in Sao Paulo. Iron ore for immediate delivery climbed 1.7 percent to $95.30 a ton, according to prices compiled by The Steel Index Ltd.

“Considering current iron-ore prices, Vale looks pretty attractive,” Joao Pedro Brugger, who helps oversee 520 million reais as a portfolio manager at Leme Investimentos, said by phone from Florianopolis, Brazil. “The external outlook still seems positive enough to support some flow to emerging markets, but looking at domestic issues, it’s not very encouraging.”

Emerging-market stocks advanced amid speculation the Federal Reserve will keep U.S. interest rates low to support the economy. The Bloomberg Base Metals 3-Month Price Commodity Index gained 0.4 percent. Vale added 2.2 percent to 26.38 reais, contributing the most for the Ibovespa’s gain. Fibria advanced 0.3 percent to 21.95 reais.

Inflation Report

In Brazil, the central bank said in its quarterly inflation report published today that it was cutting its 2014 economic growth estimate to 1.6 percent from 2 percent three months ago. It projected that consumer prices are projected to rise 6.4 percent this year if the benchmark lending rate stays at 11 percent. The upper limit of the official target range is 6.5 percent.

Natura retreated 3.3 percent to 38.10 reais.

The Ibovespa entered a bull market on May 7, surging 20 percent from this year’s low, as Petroleo Brasileiro SA rallied on speculation a change in government will reduce intervention in state-run companies.

Trading volume of stocks in Sao Paulo today was 5.04 billion reais, according to data compiled by Bloomberg. That compares with a daily average of 6.63 billion reais this year, according to data from the exchange.