Ibovespa Futures Drop as Global Growth Concern Saps Stock Demand

Ibovespa futures sank as speculation that U.S. lawmakers will miss a deadline to raise the country’s debt limit fueled concern that global economic growth will falter, damping demand for Brazilian stocks.

Hypermarcas SA (HYPE3), a manufacturer of consumer products including diapers and generic drugs, may move after it was rated the equivalent of buy in new coverage at Credit Suisse Group AG. Eike Batista’s shipbuilder OSX Brasil SA (OSXB3) may be active after saying it’s still renegotiating a 548 million-real loan due on Oct. 15 with Brazil’s national development bank.

Ibovespa futures contracts expiring on Oct. 16 fell 0.4 percent to 52,845 at 9:27 a.m. in Sao Paulo. The real was little changed at 2.1755 per dollar. Standard & Poor’s 500 Index futures expiring in December dropped 0.8 percent.

“The fiscal impasse in the U.S. is still putting pressure on global equities, after no deal was reached during the weekend,” Banco Bradesco’s economic team wrote in a note to clients today. “Brazilian stocks will probably fall, given the concerns about the external outlook.”

With the U.S.’s borrowing authority set to lapse Oct. 17, Senate Majority Leader Harry Reid said yesterday that he had a “productive conversation” with Minority Leader Mitch McConnell without reaching a conclusion on a plan to send to the chamber for a vote. The U.S. government began a partial shutdown Oct. 1 after Congress failed to pass a spending authorization bill for the financial year.

The Ibovespa entered a bull market Sept. 9 after rising 20 percent from this year’s low on July 3 through that day. The gauge is still down 18 percent in dollar terms this year, compared with a decline of 3.2 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Trading volume of stocks in Sao Paulo was 5.12 billion reais on Oct. 11, compared with a daily average of 7.58 billion reais this year through Oct. 10, 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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