Ibovespa Falls Third Day as AmBev Sinks on Brazil Growth Concern

The Ibovespa fell for a third straight session as brewer AmBev SA led a decline in consumer stocks after economists lowered their growth forecast for Latin America’s biggest economy.

Consumer products maker Hypermarcas SA (HYPE3) retreated to a six-month low. The MSCI Brazil/Consumer Staples Index sank to the lowest since November 2011. Homebuilder Brookfield Incorporacoes SA (BISA3) rallied after saying it may sell new shares or delist the company. Online retailer B2W Cia. Digital surged the most on record after saying it would sell new shares to its controlling shareholder and a U.S. investment firm.

The Ibovespa lost 0.2 percent to 47,701.05 at the close of trading in Sao Paulo, as 36 of its 72 member stocks declined. Brazil’s gross domestic product will expand 1.91 percent in 2014, according to the median of about 100 estimates in a weekly central bank survey published today. That compares with a previous projection of 2 percent. They lowered their projection for next year to 2.2 percent from 2.5 percent.

“The growth scenario all over the world is challenging, but in Brazil it’s worse,” Pedro Paulo Silveira, executive director at Vetorial Asset Management, said in a phone interview from Sao Paulo. “Inflation is still high, and the central bank obviously will have to raise its benchmark interest rate.”

The real weakened 1.1 percent to 2.4244 per dollar at 5:29 p.m. local time.

Brazil’s central bank will lift the Selic to 11 percent this year, up from the previous week’s forecast of 10.75, according to the weekly survey. The bank on Jan. 15 raised the benchmark by 50 basis points to 10.50 percent.

AmBev, Hypermarcas

Annual inflation slowed through mid-January to 5.63 percent from the prior 5.85 percent pace and 6.67 percent in mid-June, the national statistics agency said Jan. 23.

AmBev dropped 2.4 percent to 16.04 reais. Hypermarcas retreated 1.7 percent to 15.55 reais.

The Ibovespa (IBOV) earlier added as much as 0.8 percent, rebounding from the lowest level since August on speculation four consecutive weeks of declines were excessive.

“Last week’s drop opens room for acquisitions of stocks that are at attractive valuation,” Andre Moraes, an analyst at the brokerage firm Rico.com.vc, said in a telephone interview from Sao Paulo. “Many companies fell too much and are relatively cheap now. We expect stocks to recover a little in the coming days.”

Lender Itau Unibanco Holding SA (ITUB) rose 2 percent to 29.85 reais. The shares were trading at 8.59 times estimated earnings, the lowest since May 2012, data compiled by Bloomberg show.

Brookfield jumped 4 percent to 1.29 reais. B2W gained 42 percent to 21.95 reais.

The Ibovespa has tumbled 16 percent from a bull-market high on Oct. 22 as inflation exceeded policy makers’ target for a third consecutive year and concern mounted that higher government spending will lead to a reduction in the country’s credit rating.

Trading volume of stocks in Sao Paulo was 5.69 billion reais today, data compiled by Bloomberg show. That compares with a daily average of 6.28 billion reais this month, according to data from the exchange.

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

To contact the editor responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net

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