Ibovespa Futures Fall as Economists Cut Brazil Growth Forecast

Ibovespa futures fell, a sign the equity index may decline for a second session, after a survey showed economists covering Brazil cut their economic growth forecasts for a seventh consecutive week.

Gerdau SA, Latin America’s largest steelmaker, may move after Bank of America Corp. boosted its recommendation to buy. Homebuilder Rossi Residencial SA may be active after it was raised to the equivalent of hold at Morgan Stanley.

Ibovespa futures contracts expiring in August sank 0.5 percent to 46,880 at 9:33 a.m. in Sao Paulo, erasing an earlier advance of 0.8 percent. The real strengthened 0.1 percent to 2.2285 per dollar. Economists covering Brazil lowered their estimate for 2013 growth to 2.40 percent from 2.46 percent, according to a central bank survey released today.

“The main concern right now with the Brazilian economy is the risk of further deceleration,” equity analyst Carlos Firetti and economist Dalton Gardimam at Banco Bradesco SA’s brokerage unit wrote in a note to clients.

The Ibovespa slumped into a bear market on June 11 after falling more than 20 percent from this year’s peak on Jan. 3. It has since extended those losses to 25 percent. Brazil’s benchmark equity gauge trades at 12.1 times analysts’ earnings estimates for the next four quarters, compared with 10.3 for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Trading volume for stocks in Sao Paulo was 8.97 billion reais on June 28, compared with a daily average of 7.93 billion reais this year through June 25, 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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