Ibovespa Falls to Eight-Month Low as Vale Drops With Commodities

The Ibovespa fell to the lowest since July as commodity exporters including iron-ore producer Vale SA (VALE5) tumbled amid signs that growth is slowing in China, Brazil’s biggest trading partner.

Steelmaker Cia. Siderurgica Nacional SA sank the most on the benchmark equity gauge. The MSCI Brazil/Materials Index was the worst performer among 10 industry groups. Meatpacker Marfrig Global Foods SA (MRFG3) rose the most on the index as quarterly earnings exceeded estimates.

The Ibovespa slipped 1.3 percent to 45,632.17 at 10:48 a.m. in Sao Paulo as 66 stocks fell and six advanced. The real rose 0.3 percent to 2.3340 per U.S. dollar. Iron ore for immediately delivery slumped 8.3 percent, according to prices compiled by The Steel Index Ltd., as China’s exports declined last month the most since 2009.

“The data about China’s economy have been indicating a deceleration,” Eduardo Velho, the chief economist at INVX Global Partners in Sao Paulo, said in a phone interview. “And that’s very negative for commodity producers that sell to the country, especially Brazilian iron-ore companies and steelmakers.”

Commodity producers account for 35 percent of the Ibovespa’s weighting, according to data compiled by Bloomberg. Vale, the heaviest-weighted stock on the benchmark gauge, dropped 2.3 percent to 26.47 reais. CSN, as Siderurgica Nacional is known, sank 3 percent to 8.88 reais. Marfrig dropped 3.5 percent to 4.12 reais.

The Ibovespa has tumbled 19 percent from a bull-market high on Oct. 22 as inflation exceeded policy makers’ target 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 on March 7 was 7.3 billion reais, compared with a daily average of 6.35 billion reais this year, 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 editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net Richard Richtmyer, Dennis Fitzgerald

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