Ibovespa Futures Fluctuate as Metals Rally Blunts Growth Outlook

Ibovespa futures were little changed, a day after the equity gauge posted a seventh straight gain, as a rally in commodities offset JPMorgan Chase & Co.’s cut to its estimate for Brazilian growth.

Gerdau SA, Latin America’s biggest steelmaker, may be active after Santander raised its recommendation on the stock to buy from underperform. Eike Batista’s flagship oil producer OGX Petroleo & Gas Participacoes SA may move after Standard & Poor’s cut its rating to CCC- from CCC, with a negative outlook.

Ibovespa futures contracts expiring in October were little changed at 50,370 at 9:26 a.m. in Sao Paulo after gaining and falling as much as 0.3 percent. The real weakened 0.4 percent to 2.3497 per dollar.

The Bloomberg Base Metals 3-Month Price Commodity Index climbed 0.9 percent. JPMorgan cut its forecast for the Brazil’s economic growth in 2014 to 2.4 percent from 2.7 percent, according to a research report.

“Although activity was accelerating until June, we should see July activity numbers plunging as there was a widespread decline in confidence,” JPMorgan analysts led by Fabio Akira wrote in a report. “However, even acknowledging that part of this decline in sentiment could be temporary, we think that it could have longer-lasting economic implications.”

The Ibovespa has gained 13 percent from this year’s low on July 3 as higher commodities prices boosted raw-material exporters and OGX led a rally by companies owned by Batista. Brazil’s benchmark equity gauge trades at 13.3 times analysts’ earnings estimates for the next four quarters, compared with 10.5 for the MSCI Emerging Markets Index of 21 developing nations’ equities.

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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