Bovespa Declines as Brazil Exports Seen Hurt by China Slowdown

The Bovespa index fell to a six- week low as a drop in commodities prices pushed raw-material producers down amid concern growth will falter in China, Brazil’s biggest trading partner.

Mining company Vale SA (VALE5), whose top export market is China, slid as metals prices declined. BM&FBovespa SA (BVMF3), the operator of Latin America’s biggest securities exchange, sank the most in four weeks after a court ordered it to pay 8.42 billion reais ($4.62 billion) in a civil case.

The Bovespa fell 1.5 percent to 65,079.34 at the close of trading in Sao Paulo. Fifty-five stocks dropped on the gauge while 14 advanced. The real weakened 0.2 percent to 1.8259 per U.S. dollar. The Standard & Poor’s GSCI index of 24 raw materials fell 1.2 percent.

China’s biggest copper producer and largest airline posted profits that trailed estimates yesterday, joining banks and energy companies with results that indicate slower economic growth is dragging down corporate earnings.

“Given its size, every little sign of a deeper slowdown in China has a big effect on the market, especially in Brazil, where many listed companies depend on commodities exports,” Leandro Martins, head of research at Walpires SA, said in a phone interview.

Vale lost 1.7 percent to 40.66 reais today. Cia. Siderurgica Nacional SA (CSNA3), Brazil’s third-biggest steelmaker, tumbled 3 percent to 17.35 reais. Petroleo Brasileiro SA (PETR4), Brazil’s state-controlled oil company, dropped 1.7 percent to 23.39 reais, following crude prices lower. The MSCI Brazil/Materials index fell the most since March 12.

BM&FBovespa Slides

BM&FBovespa slumped 2.6 percent to 11.69 reais. The Sao Paulo-based company said it was found liable of being involved in losses incurred by the central bank related to futures trading near the time of the 1999 currency devaluation.

When Brazil devalued the real in 1999, the central bank sold dollars to banks that were short selling the U.S. currency in the local derivatives market. BM&FBovespa is accused of benefiting from the transaction.

Rossi Residencial SA (RSID3), Brazil’s sixth-biggest homebuilder by revenue, rose 0.7 percent to 10.33 reais. The company reported adjusted net income of 87 million reais in the fourth quarter, which compares with the average of 78.1 million reais in a Bloomberg survey of 10 analysts.

Cia. Energetica de Minas Gerais, the state-controlled electricity utility serving Minas Gerais state, dropped 0.3 percent to 43.95 after earlier rising as much as 3 percent. Cemig said its net income was 710 million reais in the fourth quarter, compared with an average estimate of 470 million reais among seven analysts surveyed by Bloomberg.

Quarterly Gain

Brazil’s benchmark equity measure has advanced 15 percent this year, heading for its biggest quarterly gain since the period ended September 2009. Stocks have been buoyed by interest-rate cuts in Latin America’s largest economy, signs of growth in the U.S. and speculation Europe may be closer to solving its debt crisis.

The Bovespa trades at 10.8 times analysts’ earnings estimates, which compares with a 10.6 ratio for MSCI Inc.’s measure of 21 developing nations’ equities, weekly data compiled by Bloomberg show.

Traders moved 6.84 billion reais in stocks in Sao Paulo today, data compiled by Bloomberg show. That compares with a daily average of 7.19 billion reais this year through March 16, according to data from the exchange.

To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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