Ibovespa Futures Drop as Brazil Industrial Production Shrinks

Ibovespa futures dropped, after the equity gauge rallied the most in 13 months yesterday, as a report showed that Brazil’s industrial production dropped more than analysts forecast in July.

Oil company HRT Participacoes em Petroleo SA may be active after saying it is looking for partners to develop gas projects in Brazil’s Solimoes Basin. Gol Linhas Aereas Inteligentes SA (GOLL3) may move after Banco Santander SA lowered its recommendation on the airline to the equivalent of sell.

Ibovespa futures contracts expiring in October fell 0.7 percent to 50,500 at 9:16 a.m. in Sao Paulo. The real weakened 0.9 percent to 2.3983 per dollar. Brazil’s industrial production declined 2 percent in July from a month earlier, the national statistics agency reported today, after gaining 2.1 percent in June. The median forecast of economists surveyed by Bloomberg was for a 1.3 percent drop.

“Economic prospects remain bleak,” Banco BTG Pactual SA’s analysts including Carlos Sequeira wrote in a report. “Chances are high that GDP growth in 2014 may end up coming below 2013.”

State-controlled oil company Petroleo Brasileiro SA may move after saying crude and gas output in Brazil fell 4.9 percent in July from a month earlier.

The Ibovespa has gained 15 percent from this year’s low on July 3 as higher commodities prices and a weaker real fueled a rally in raw-material exporters. Brazil’s benchmark gauge climbed 10 percent in dollar terms during the period, compared with an advance of 2.8 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Trading volume of stocks in Sao Paulo was 5.84 billion reais yesterday, compared with a daily average of 7.74 billion reais this year through Aug. 30, 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: Brendan Walsh at bwalsh8@bloomberg.net

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