The Bovespa stock index fell for a fourth day, the longest losing streak since May, as additional evidence that China’s economy is slowing overshadowed a bigger-than-forecast rise in Brazilian retail sales.
Petroleo Brasileiro SA’s common shares dropped the most in three months after UBS AG recommended selling the stock. Fibria Celulose SA, the world’s largest pulp producer, and MMX Mineracao & Metalicos SA, the iron-ore producer controlled by Brazilian billionaire Eike Batista, led declines among raw-materials producers as slower Chinese growth dimmed the outlook for commodity prices. Lojas Renner SA, Brazil’s biggest publicly traded clothing retailer, rose 1.9 percent.
The Bovespa lost 2.1 percent, the most since June 29, to 65,790.29 at the close of trading in Sao Paulo at 4 p.m. New York time. Fifty-five stocks fell on the measure while nine gained. The real weakened 1.2 percent to 1.7736 per dollar.
“The market is very anxious,” said Guilherme Reboucas, who helps oversee the equivalent of $10.5 billion in stocks at Sao Paulo-based Itau Unibanco Holding SA. “Whenever there’s a sign of a slowdown in China, people sell off commodities stocks. It’s exaggerated.”
China’s industrial output rose the least in 11 months, retail sales growth eased and new loans climbed less than estimated, adding to signs that a slowdown in the world’s third-biggest economy is deepening.
Production increased 13.4 percent from a year earlier, the statistics bureau said in Beijing today. Inflation quickened to 3.3 percent, the fastest in 21 months, boosted by a low year-earlier base for comparison and rising food costs. The government is cracking down on real-estate speculation, curbing credit and closing factories to meet energy-efficiency targets after three quarters of growth of more than 10 percent.
The Bovespa fell yesterday as commodities producers tumbled amid signs of an economic slowdown in China. The measure has slipped 4 percent from a three-month high on Aug. 2.
Brazil’s retail sales rose 1 percent in June from the previous month, the national statistics agency said today. That’s higher than the median estimate of 0.5 percent in a Bloomberg survey of 27 analysts. Lojas Renner increased 1.9 percent to 54 reais.
Petrobras, Brazil’s state-controlled oil company, common shares declined 3.8 percent to 31.65 reais after UBS AG became the only bank to recommend selling Brazil’s state-controlled oil company. UBS lowered its rating on the voting stock to “sell” from “neutral,” saying earnings will be diluted by a planned equity offering. Nine analysts recommend buying the stock and three advise holding it, according to data compiled by Bloomberg.
Fibria plunged 5.4 percent to 27.31 reais while MMX Mineracao slid 3.9 percent to 12.18 reais. The MSCI Brazil/Materials Index fell the most since June 29, losing 4.1 percent.
The Bovespa index trades for 13.1 times analysts’ 2010 earnings estimates, compared with 12.3 times for the MSCI Emerging Markets Index of 21 developing nations’ stocks and 16.7 times for Mexico’s IPC index, according to weekly data compiled by Bloomberg. The Bovespa trades at 14.8 times the reported profits of its companies after fetching 25.5 times in November, the most in almost six years, weekly data show.