Ibovespa Heads for Weekly Drop as Growth Concern Saps Builders

The Ibovespa headed for a third straight weekly decline after a report showing Brazil’s economic activity contracted in November pushed homebuilders lower.

PDG Realty SA Empreendimentos e Participacoes was the worst performer among real-estate companies, and retailer Lojas Americanas SA (LAME4) sank to the lowest since August. University operator Estacio Participacoes SA led losses on the MSCI Brazil/Consumer Discretionary Index after denying a report that it’s in talks to merge with U.S.-based Laureate Education Inc.

The Ibovespa sank 0.4 percent to 49,481.29 at 10:26 a.m. in Sao Paulo, with 62 of its 72 members falling. The stock benchmark is also down 0.4 percent this week. The real dropped 0.1 percent to 2.3629 per U.S. dollar today. Brazil’s economic activity index, a proxy for gross domestic product, declined 0.31 percent in November from a month earlier.

“The Ibovespa is still struggling because the economy is very weak,” Alvaro Bandeira, a partner at Orama Asset Management, said in a telephone interview. “There’s nothing really positive on the domestic front that could drive a rebound in the stock market.”

PDG lost 2.7 percent to 1.82 reais. Lojas Americanas sank 1.6 percent to 14.89 reais. Estacio declined 1.6 percent to 19.41 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: Brendan Walsh at bwalsh8@bloomberg.net

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