The Bovespa index fell the most among major stock indexes in the Americas as Brazilian corporate earnings in the second quarter trailed analysts’ estimates, overshadowing positive economic reports in Germany and the U.S.
Vale SA (VALE), the world’s largest iron-ore producer, contributed the most to the decline after Bank of America Corp. cut its rating on the stock to hold from buy. Air carrier Gol Linhas Aereas Inteligentes SA (GOLL4) fell the most in a year after saying its quarterly loss doubled. Of 47 companies on the Bovespa that have reported second-quarter profit, at least 27 posted results that missed analysts’ estimates.
The Bovespa retreated 1.8 percent to 58,082.92 at the close of trading in Sao Paulo. The real weakened 0.3 percent to 2.0262 per U.S. dollar.
“The global economic environment is already very pessimistic, so, with poor corporate earnings, investors see no reason to put their money into the Brazilian stock market,” Jason Vieira, an analyst at brokerage Cruzeiro do Sul Corretora, said by phone from Sao Paulo.
Vale fell 3.8 percent to 36.24 reais. Gol plunged 13 percent to 9.55 reais.
The Bovespa earlier advanced as much as 0.8 percent as reports showed signs of economic improvement in Europe and the U.S., buoying prospects for Brazil’s exporters, and after Petroleo Brasileiro SA (PETR4) gained following an oil discovery at its offshore Carcara prospect in Brazil.
Germany’s gross domestic product rose 0.3 percent in the second quarter, exceeding the 0.2 percent median estimate of 40 analysts surveyed by Bloomberg. France’s GDP was unchanged, compared with the 0.1 percent decline economists had predicted. U.S. retail sales advanced 0.8 percent in July. Economists projected a 0.3 percent gain.
The Bovespa index trades at 11.3 times analysts’ earnings estimates for the next four quarters, which compares with 10.8 times for MSCI Inc.’s measure of 21 developing nations’ equities, data compiled by Bloomberg show.
Trading volume was 6.91 billion reais ($3.41 billion) in stocks in Sao Paulo today, data compiled by Bloomberg show. That compares with a daily average of 7.14 billion reais this year through Aug. 13, according to data compiled by the exchange.
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