The Bovespa index fell as Centrais Eletricas Brasileiras SA (ELET6) tumbled after Brazil reduced electricity costs more than previously announced, overshadowing a surge by planemaker Embraer SA. (EMBR3)
Eletrobras, as the state-controlled utility is known, slipped the most on the benchmark. Steelmaker Usinas Siderurgicas de Minas Gerais SA tumbled to the lowest since November. Embraer jumped after signing a $4 billion contract with Republic Airways Holdings Inc.
The Bovespa fell 0.5 percent to 61,649.95 at 3:39 p.m. in Sao Paulo after earlier rising as much as 0.5 percent. Forty- five stocks dropped on the measure while 20 advanced. The real strengthened 0.2 percent to 2.0312 per U.S. dollar.
Eletrobras fell 5.6 percent to 7.40 reais after President Dilma Rousseff said yesterday that electricity rate cuts taking effect today will pare consumers’ power costs 18 percent and those for industry by 32 percent, compared with the reductions of 16.2 percent and 28 percent she had announced in September.
“Power utilities have been suffering a lot because of these measures, and today’s decline is a reaction to the latest announcement,” Luis Gustavo Pereira, an analyst at Futura Corretora in Sao Paulo, said in a telephone interview.
Usiminas, as Usinas Siderurgicas is also known, dropped 3.7 percent to 10.59 reais. Embraer rose 8.1 percent to 15.81 reais.
To contact the editor responsible for this story: David Papadopoulos at email@example.com