Most Brazilian Stocks Falls as Renner Drops on Inflation Outlook

Most Brazilian stocks fell as as retailer Lojas Renner SA led consumer companies lower after economists covering Brazil raised their inflation forecasts for next year.

Petroleo Brasileiro SA (PETR4), the state-controlled oil producer known as Petrobras, declined as crude slid from a six-week high and Itau BBA said the company’s February output data was worse than expected. Steelmaker Cia. Siderurgica Nacional SA rose after fourth-quarter profit beat estimates.

The Bovespa index was little changed at 56,333.41 at 10:45 a.m. in Sao Paulo. Forty-seven stocks retreated on the benchmark while 21 advanced. The real rose 0.1 percent to 2.0190 per dollar as the Standard & Poor’s GSCI index of 24 raw materials lost 0.7 percent. Economists forecast 2014 inflation at 5.68 percent, up from a 5.60 percent projection in previous week, according to central bank survey released today.

“Things are still complicated, and investors are still skeptical about what will happen in the short term,” Marcio Cardoso, a partner at brokerage Titulo Corretora de Valores SA in Sao Paulo, said by phone. “Inflation expectations are still high, far from the target’s midpoint. That doesn’t help the market.”

Renner, Petrobras

Brazil’s HSBC Purchasing Managers’ Index for the manufacturing sector fell to 51.8 in March compared with 52.5 in February, Markit Economics said today on its website.

Renner declined 0.6 percent to 75.17 reais. Petrobras, dropped 0.1 percent to 18.34 reais. CSN, as Cia. Siderurgica is also known, gained 3.7 percent to 9.47 reais.

The Bovespa has retreated 11 percent from this year’s high on Jan. 3 amid concern accelerating inflation may curb Brazil’s economic recovery and the government’s interventionist policies will hurt profits in industries including utilities and energy. The MSCI BRIC Index of shares in Brazil, Russia, India and China has lost 6.4 percent over the same period.

Trading volume for stocks in Sao Paulo was 6.78 billion reais on March 28, which compares with a daily average of 7.56 billion reais this year through March 26, according to data compiled by the exchange.

To contact the reporter on this story: Julia Leite in New York at jleite3@bloomberg.net

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

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