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Ibovespa Drops to One-Week Low on Export Outlook as Vale Sinks

The Ibovespa fell to a one-week low as slower growth in China’s manufacturing spurred concern that growth will falter in Brazil’s top trading partner and U.S. policy makers said stimulus may be cut in the coming months.

Petroleo Brasileiro SA (PETR4) contributed the most to the index’s decline after Finance Minister Guido Mantega, who is also the oil company’s chairman, said the producer delayed by one week a board meeting on a new fuel price policy. Iron-ore producer Vale SA (VALE5), whose main export market in China, fell for a second day.

The Ibovespa slid 1.2 percent to 52,397.32 at 10:36 a.m. in Sao Paulo, with 60 of its 72 member stocks trading lower. The real weakened 1.5 percent to 2.3075 per U.S. dollar. Federal Reserve officials said they may reduce the $85 billion in monthly bond purchases “in coming months” as the economy improves, minutes of their most recent meeting show.

“The Fed left the door open to start cutting back on monetary stimulus as soon as December, which is weighing on the Ibovespa,” Luciano Rostagno, the chief strategist at Banco Mizuho do Brasil SA in Sao Paulo, said in a phone interview. “Figures from China were also negative. Because of these two issues, the trend for the Ibovespa is negative.”

China’s preliminary reading for this month’s Purchasing Managers’ Index was 50.4, according to HSBC Holdings Plc and Markit Economics. That compared with a 50.8 median estimate from analysts surveyed by Bloomberg and a final number of 50.9 for October. Levels above 50 indicate expansion.

Petrobras, as Petroleo Brasileiro is known, dropped 2.3 percent to 20.62 reais. Vale lost 1.3 percent to 32.34 reais.

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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