Bovespa Falls as OGX Follows Commodities Prices Lower

(Corrects energy regulator name to Aneel in second and sixth paragraphs.)

The Bovespa (IBOV) index dropped for a third day as oil company OGX Petroleo & Gas Participacoes SA led declines by Brazilian producers amid a tumble in commodities prices sparked by concern global growth will falter.

Steelmaker Cia. Siderurgica Nacional SA followed metals lower, and mining company Vale SA contributed the most to the stock gauge’s decline. Cia. Energetica de Sao Paulo rallied after Brazil regulator Aneel said it may raise the amount offered to compensate the utility for lower electricity rates.

The Bovespa slid 0.7 percent to 55,872.35 at 11:24 a.m. in Sao Paulo. The real weakened 0.4 percent to 2.0919 per U.S. dollar. The Standard & Poor’s GSCI index of 24 raw materials lost 0.7 percent after U.S. Senate Majority Leader Harry Reid said yesterday he was disappointed with congressional budget talks aimed at averting $607 billion in automatic tax increases and spending cuts in January. Crude slumped as much as 1.2 percent in New York.

“The so-called fiscal cliff in the U.S. is the latest in a long string of bad news we’ve seen in the global economy for quite some time, and it’s now the main source of concern for investors,” Fernando Goes, an analyst at Clear Corretora brokerage in Sao Paulo, said in a phone interview.

OGX lost 2 percent to 4.35 reais. Cia. Siderurgica fell 1.1 percent to 10.03 reais. Vale retreated 1 percent to 35.37 reais.

Cia. Energetica de Sao Paulo, also known as Cesp, jumped 3.5 percent to 17.60 reais. Aneel’s press office said in an e- mailed response to questions that it’s revising the amount of compensation to be offered to the company. Newspaper O Estado de S.Paulo earlier today reported on the regulator’s decision.

‘Marginal’ Adjustment

Any possible correction in the compensation Cesp would get for reducing electricity rates wouldn’t be significant, Deputy Energy Minister Marcio Zimmermann said in Brasilia today.

“In a universe of 20 billion reais, any 100 million reais above or below would be marginal,” Zimmermann said.

Brazil proposed on Nov. 1 compensating utilities a total of about 19 billion reais for next year’s renewal of generation and transmission contracts that were to end between 2015 and 2017. Companies have until Dec. 4 to accept or reject the offer.

The Bovespa has climbed 6.5 percent from this year’s low on June 5 as stimulus from central banks around the world eased economic concern and borrowing costs at a record low in Brazil boosted equity demand. The index trades at 10.4 times analysts’ earnings estimates for the next four quarters, which compares with 10.5 times for MSCI Inc.’s measure of 21 developing nations’ equities, data compiled by Bloomberg show.

Trading volume was 6.23 billion reais in stocks in Sao Paulo yesterday, compared with a daily average of 7.17 billion reais this year through Nov. 26, according to data compiled by 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 in New York at papadopoulos@bloomberg.net

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