The Ibovespa retreated from a four-month high as Cyrela Brazil Realty SA (CYRE3) led homebuilders lower amid speculation recent gains might have been excessive given the outlook for slow economic growth in the country.
State-run oil company Petroleo Brasileiro SA (PETR4) snapped a five-session advance. Phone company Oi SA (OIBR4) declined after saying that a group of banks will no longer commit to purchasing shares that investors don’t buy in an offering scheduled for April 28.
The Ibovespa lost 0.7 percent to 51,342.96 at 11:11 a.m. in Sao Paulo, with 49 stocks lower and 19 higher. The gauge rose the most among the world’s biggest equity indexes yesterday, pushing the ratio of price to forecast earnings on its members to 10.11, the highest since Jan. 3, according to data compiled by Bloomberg. The real fell 0.5 percent to 2.2811 per U.S. dollar today.
“I don’t see much room for further gains, as nothing has changed when it comes to the economy,” Joao Pedro Brugger, who helps oversee 400 million reais as a portfolio manager at Leme Investimentos, said by phone from Florianopolis, Brazil. “Economic activity is still weak and inflation continues to be an issue.”
Brazil’s gross domestic product will expand 1.69 percent this year after 2.28 percent growth in 2013, according to a central bank survey of about 100 economists published this week. Consumer prices will increase 6.3 percent, faster than the 4.5 percent midpoint of the government’s target range, the survey showed.
Cyrela sank 2.8 percent to 13.62 reais. Petrobras, as Petroleo Brasileiro is known, slipped 1.1 percent to 15.39 reais. Oi lost 0.7 percent to 3.06 reais.
The Ibovespa has gained 14 percent since this year’s low on March 14 as state-run companies including utility Centrais Eletricas Brasileiras SA (ELET6) rebounded.
To contact the editors responsible for this story: Brendan Walsh at email@example.com Richard Richtmyer