Ibovespa Futures Drop as Commodities Decline Amid U.S. Concern

Ibovespa futures fell as lower commodities prices dimmed the outlook for Brazil’s raw materials exports amid concern the U.S. government is heading for a shutdown over a budget stalemate.

Oil company OGX Petroleo e Gas Participacoes SA may move after two people with direct knowledge of the matter said it plans to miss a $44.5 million payment on dollar bonds scheduled for tomorrow. Vale SA may be active after data showed manufacturing increased less than forecast in China, the iron-ore producer’s biggest export market.

Ibovespa futures contracts expiring in October declined 1.1 percent to 52,780 at 9:22 a.m. in Sao Paulo. The benchmark stock index is up 13 percent this quarter. The real climbed 0.2 percent to 2.2471 per dollar.

U.S. lawmakers have to approve emergency legislation by midnight to keep the federal government operating tomorrow, the beginning of the 2014 fiscal year. Failure to do so may result in as many as 800,000 federal employees being placed on temporary unpaid leave. A shutdown would reduce fourth-quarter economic growth in Brazil’s second-largest trade partner by as much as 1.4 percentage points depending on its length, according to economists.

The Ibovespa entered a bull market Sep. 9 after rising 20 percent from this year’s low on July 3 through that day. The gauge is still down 20 percent in dollar terms this year, compared with a decline of 6.2 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Trading volume of stocks in Sao Paulo was 6.11 billion reais on Sep. 27, compared with a daily average of 7.71 billion reais this year through Sept. 24, 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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