Ibovespa Drops Second Day as Vale Sinks With Commodity Prices

The Ibovespa fell for a second day as Brazilian exporters including iron-ore producer Vale SA tumbled with commodity prices.

Banco Bradesco SA led declines among banks as the MSCI Brazil/Financials Index fell the most among 10 industry groups. Clothing seller Cia. Hering (HGTX3) led gains for retailers after a report showed that Brazil’s annual inflation slowed in mid-September to below 6 percent for first time in nine months.

The Ibovespa dropped 0.9 percent to 54,621.69 at 11:04 a.m. in Sao Paulo, paring a weekly gain to 1.6 percent. Brazil’s benchmark equity gauge rose 2.6 percent on Sept. 18 after the Federal Reserve unexpectedly maintained a U.S. stimulus program that has helped boost demand for emerging market assets. The real weakened 0.1 percent to 2.2034 today, cutting a weekly advance to 3.5 percent.

“We’re still in the hangover after Fed’s decision two days ago,” Luis Gustavo Pereira, the head strategist at the brokerage Futura Corretora, said in a phone interview from Sao Paulo. “Uncertainty about the U.S. stimulus program boosted commodities prices and Brazilian raw materials producers for some weeks, and now investors are adjusting prices and expectations to a new scenario.”

Forty-nine of the benchmark index’s 73 member stocks declined. The Standard & Poor’s GSCI Index of 24 raw materials fell 0.2 percent. Commodity producers account for 39 percent of the Ibovespa’s weighting.

Vale fell 0.1 percent to 32.57 reais. Bradesco sank 1.9 percent to 30.78 reais.

Hering gained 0.5 percent to 35.08 reais. Consumer prices advanced 5.93 percent in the year through mid-September compared with 6.15 percent a month earlier, according to the national bureau of statistics. The median estimate of 24 economists surveyed by Bloomberg was 5.94 percent.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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