Ibovespa Futures Fall as Santander Cuts Brazilian Stock Outlook

Ibovespa futures dropped, after the equity gauge declined for a third day yesterday, as Banco Santander SA lowered its forecast for the index, citing slower economic growth and a weaker currency in Brazil.

Steelmaker Cia. Siderurgica Nacional SA may be active after unexpectedly posting a profit for the second quarter, while card-payment processor Cielo SA (CIEL3) reported net income that missed analysts’ estimates. Oil company HRT Participacoes em Petroleo SA may move as it started drilling its third well off the coast of Namibia.

Ibovespa futures contracts expiring this month sank 0.1 percent to 47,120 at 9:22 a.m. in Sao Paulo. The real fell 0.2 percent to 2.3033 per dollar.

Brazil’s gross domestic product will expand 2 percent this year, down from a previous 3 percent forecast, Santander’s analysts Daniel Gewehr and Joao Noronha wrote in a report today. The real will trade from 2.30 per dollar to 2.45 per dollar in the next two years, they projected.

“Our updated economic forecasts for 2013-15 are negative for equities,” Santander’s analysts wrote.

The Ibovespa slumped 22 percent this year through yesterday, wiping out $257 billion from the value of Brazilian stocks, according to data compiled by Bloomberg. Brazil’s benchmark equity gauge trades at 11.6 times analysts’ earnings estimates for the next four quarters, compared with 10.2 for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Trading volume in Sao Paulo was 6.43 billion reais yesterday, compared with a daily average of 7.59 billion reais this year through Aug. 5, 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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