Vale, the world's largest iron-ore miner, sank to a two-month low after the steelmaking ingredient tumbled on concern supplies are too high. The Ibovespa fluctuated, set for the best first half of any year since 2009.

Shares of Vale extended their 2015 plunge to 18 per cent after Australia cut its price estimates for the commodity, saying the nation's exports will surge next year. The raw material dropped below $US60 a ton, trimming this quarter's advance to 16 per cent.

The slump in iron ore sent a gauge of commodity shares in the MSCI Brazil to the only decline among 10 industries Tuesday. While stock swings have abated this month, they reached the highest level since 2011 at the end of May amid a roller-coaster ride in the raw material.

"Vale has fallen a lot because of prospects for iron ore," Pedro Paulo Silveira, the chief economist at brokerage TOV Corretora, said in a phone interview from Sao Paulo. "It's hard to forecast now where the material is going."

Commodity companies account for about a quarter of the Ibovespa. The benchmark gauge rose 0.2 per cent to 53,131.37 at 2.247pm in Sao Paulo.

Brazilian stocks rallied earlier Tuesday after Petroleo Brasileiro, the oil producer at the centre of the nation's largest graft probe, said it has no plans to sell shares before 2019. Investors had been waiting for clarity on how the state-run oil company would fund giant offshore fields without having to return to the stock market to raise cash.

The decision to stay away from equity offerings during the new business plan period brings some relief to shareholders, Bank of America said in a note to clients.

"That may also show Petrobras's financing needs are not as big as investors feared," Silveira said. "The company is paving the way for bigger profits and returns."

Gains in the Ibovespa were also limited amid 11th-hour wrangling before bailout funding for Greece ends. While less than 0.1 per cent of Brazil's exports went to Greece last year, some of its biggest markets are those most vulnerable to a fallout from the Greek crisis. Nineteen per cent of the goods sent abroad went to the European Union, and 56 per cent went to developing countries.

The Ibovespa has slid 8.4 per cent from this year's high amid bets Latin America's largest economy will slow further. The gauge entered a bull market in April, after rallying more than 20 per cent from its 2015 low, on speculation government measures to shore up the budget would restore confidence and as Petrobras reported long-delayed results.