SAO PAULO: Shares in Brazilian state-run oil giant Petrobras surged Thursday on the Sao Paulo stock exchange before closing up 9.63 percent after the company posted better-than-expected second-quarter profits, shrugging off last year's pandemic hit.

Petrobras reported a net profit of 42.9 billion reais ($8.1 billion, by the firm's figures) Wednesday for the period from April to June, beating analysts' expectations and reversing a loss of 2.7 billion reais ($417 million) for the same period in 2020.

Ordinary shares in the company jumped on the news to a peak of 11.8 percent before noon, before falling back to trade up by around 10 percent at closing. Preferential shares were up nearly eight percent.

Shares in Brazil's Petrobras plunge 19pc

"Besides beating expectations with its second-quarter profit, Petrobras slashed its debt, generated strong revenues, posted a strong Ebitda (earnings before interest, taxes, depreciation and amortization) and announced it would issue dividends of more than 30 billion reais," Alex Agostini, of consulting firm Austin Rating, told AFP.

"That got investors pretty excited about the company."

The rebound of the world economy sent Brent crude prices rising to an average of $68.83 in the second quarter, up 135 percent from the same period in 2020.

It was the third straight quarterly profit for Petrobras, which was hit hard last year by the Covid-induced collapse in oil prices.

The Sao Paulo stock exchange's Ibovespa index was down about 0.1 percent overall, after Brazil's central bank raised its benchmark interest rate by 100 basis points Wednesday to 5.25 percent, putting the brakes on the economy in a bid to curb sharply rising inflation.