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Bovespa Falls Most in Four Weeks as Cyrela Leads Builders Rout

The Bovespa index tumbled the most in four weeks as Cyrela Brazil Realty SA Empreendimentos e Participacoes led declines by homebuilders after a report showed construction confidence in Brazil fell in January.

Brazil’s construction confidence index declined 8.5 percent in January from a year earlier, the Sao-Paulo based Getulio Vargas Foundation said today. The index is based on a survey of executives from about 700 companies in the industry gauging their sentiment about the outlook for their business over the next six months.

The Bovespa dropped 0.5 percent to 65,530.49 at the close of Sao Paulo trading. The BM&FBovespa Real Estate Index dropped 1.8 percent, paring this year’s gain to 17 percent.

“The confidence index’s drop may be making some investors think that this year’s gain so far was a little excessive,” Luciana Leocadio, an analyst at brokerage Ativa Corretora, said by phone from Rio de Janeiro. “The index signals the outlook for the industry is much worse than it was a year ago.”

Cyrela dropped 3.5 percent to 17.26 reais. PDG Realty tumbled 3.2 percent to 7.56 reais. Rossi sank 3.4 percent to 10.28 reais.

The Bovespa earlier gained as much as 0.7 percent after consumer prices in Sao Paulo, as measured by the Foundation Economics Research Institute, climbed 0.42 percent in the four weeks ended Feb. 7, below the median estimate of a 0.57 percent increase among 19 analysts polled by Bloomberg.

Cielo Earnings

Cielo SA, Brazil’s biggest card-payment processor by market value, climbed 0.1 percent to 56 reais after earlier rising as much as 1.3 percent. The company said fourth-quarter net income rose to 504.5 million reais ($293.8 million) from 443.3 million reais a year earlier, according to a regulatory filing yesterday. That beat the average estimate of 487 million reais in a Bloomberg survey of 14 analysts.

The Bovespa has advanced 15 percent this year, after slumping 18 percent in 2011, buoyed by Brazil’s interest-rate cuts, signs of growth in the U.S. and renewed optimism Europe may be closer to solving its debt crisis. The gauge trades at 10.4 times analysts’ earnings estimates, in line with the ratio for MSCI Inc.’s measure of 21 developing nations’ equities, weekly data compiled by Bloomberg show.

Traders moved 7.28 billion reais in stocks in Sao Paulo today, data compiled by Bloomberg show. That compares with a daily average of 6.53 billion reais this year through Feb. 3, according to data from the exchange.

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