Ibovespa Futures Decline as Brazil Inflation Exceeds Estimates

Ibovespa futures dropped, a sign the stock gauge may add to a weekly decline, as a report showing Brazil’s consumer prices increased more than forecast added to concern that inflation will sap the economic recovery.

Phone company Oi SA may be active after saying Chief Financial Officer Alex Zornig and Chief Operating Officer James Meaney have left the company. Iron-ore producer Vale SA may move as metals advanced after money-market rates fell from record highs in China, the company’s main export market.

Ibovespa futures contracts expiring in August lost 0.5 percent to 48,080 at 9:31 a.m. in Sao Paulo. The real dropped for a sixth day, depreciating 0.2 percent to 2.2624 per dollar.

Consumer prices, as measured by the IPCA-15 price index, rose 0.38 percent in the month through mid-June, the national statistics agency said today. The median forecast of economists surveyed by Bloomberg was for an increase of 0.36 percent.

Bonds, stocks and commodities fell around the world yesterday after Federal Reserve Chairman Ben S. Bernanke said this week that the U.S. central bank may start reducing bond purchases this year and end the program in 2014 should risks to the U.S. economy abate.

The Ibovespa slumped into a bear market last week after falling more than 20 percent from this year’s peak on Jan. 3, and has since extended those losses to 24 percent. Brazil’s benchmark equity gauge trades at 11.6 times analysts’ earnings estimates for the next four quarters, compared with 9.7 for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Foreign investors have pulled 5.55 billion reais from Latin America’s largest equity market this month through June 17, data from the exchange show. Trading volume for stocks in Sao Paulo was 12.2 billion reais yesterday, compared with a daily average of 7.86 billion reais this year through June 18, 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 at papadopoulos@bloomberg.net

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