OGX has the third-highest weight in the Ibovespa at 5.21percent, according to data compiled by Bloomberg. That compares with 0.92 percent on Aug. 30, the data show. BM&F Bovespa SA is considering excluding stocks trading for less than 1 real, or penny stocks, from the Ibovespa, which is otherwise weighted just by trading volume, according to a statement on the exchange operator's website.

“Shares slumped on Friday as foreign investors massively sold because OGX would not be part of the MSCI Brazil anymore,” Sandro Fernandes, a trader at Geraldo Correa, said by phone from Belo Horizonte, Brazil. “Today shares are rallying because some funds needed to buy more stock as OGX's weighting on the Brazilian benchmark increased.”

Eoin Treacy's view The Bovespa Index has been ranging with a downward bias for more than two years and dropped abruptly from May to a July low near 44000. The heavy weighting of energy, resources and banking shares has been a headwind for performance and OGX in particular has been a concern. (Also see Comment of the Day on July 30th.

Today's 23% rally by OGX, albeit from a very low level, in conjunction with a more positive outlook for China's manufacturing sector contributed to a 3% overall rally. The Index has now unwound its oversold condition relative to the 200-day MA. It has posted two ranges of approximately 2000 points one above another in the last two months and a sustained move below 49,500 would now be required to question current scope for some additional upside.

The US Dollar's rally against the Brazilian Real has at least paused in the region of BRL2.4 but a sustained move below the 200-day MA would be required to question medium-term weakness.