Bovespa Falls on Concern U.S. Slowdown to Hurt Brazilian Exports

The Bovespa index dropped for the first time in three days as higher-than-forecast U.S. jobless claims spurred concern the recovery in Brazil’s second-biggest trading partner will falter.

Oil companies OGX Petroleo & Gas Participacoes SA and Petroleo Brasileiro SA contributed the most to the gauge’s drop, following crude lower. Tobacco company Souza Cruz SA led gains by consumer stocks after the Brazilian central bank signaled it may keep cutting borrowing costs.

The Bovespa slid 0.6 percent to 62,618.41 at the close in Sao Paulo. Thirty-six stocks fell on the gauge while 29 climbed. The real weakened 0.2 percent to 1.8815 per U.S. dollar at 5:25 p.m. local time.

“The short-term outlook is not that positive, as commodities producers, which account for almost half the index, suffer with the signs of slower growth in the world economy,” Jose Luiz Garcia, who helps manage 3.2 billion reais ($1.7 billion) at Mercatto Gestao de Recursos, said by phone from Rio de Janeiro. “The main risks for the equity market come from abroad.”

A U.S. Labor Department report showed jobless claims fell by 2,000 to 386,000 in the week ended April 14, compared with the median forecast for a drop to 370,000.

Petrobras, as Petroleo Brasileiro is known, slid 1.4 percent to 21.45 reais. OGX sank 3.6 percent to 12.96 reais.

Redecard SA, the card-payment processor that Itau Unibanco Holding SA is seeking to buy out, lost 0.9 percent to 32.15 reais after Banco BTG Pactual SA lowered its recommendation to the equivalent of hold.

‘Limited Upside’

Redecard offers “limited upside” as the stock trades near the 35-reais price that Itau offered to pay for the shares it doesn’t own in the company, BTG Pactual’s analysts Marcelo Henriques and Eduardo Rosman wrote in a note to clients.

Aliansce Shopping Centers SA advanced 0.7 percent to 17.79 reais. The company said sales in stores located in malls it owns rose 15 percent to 1.2 billion reais in the first quarter.

The Bovespa earlier gained as much as 0.4 percent after the central bank’s Monetary Policy Committee said risks of missing its 4.5 percent target for annual inflation are “limited” as the global outlook remains “disinflationary.” Its statement accompanied a decision last night to lower the target lending rate 75 basis points, or 0.75 percentage point, to 9 percent.

Souza Cruz advanced 1.9 percent to 29 reais, the highest since at least January 1994. Brazilian drugstore operator Raia Drogasil SA rose 2.7 percent to a record 20 reais.

Interest-Rate Futures

In the Brazilian interest-rate futures market, yields on most contracts slumped. The yield on the contract due in January dropped 25 basis points, or 0.25 percentage point, to 8.42 percent.

Brazil’s benchmark equity gauge has gained 10 percent this year, buoyed by local interest-rate cuts, signs of expansion in the U.S. and speculation Europe may be closer to resolving its debt crisis. The gauge trades at 10.4 times analysts’ earnings estimates, in line with the 10.4 ratio for MSCI Inc.’s measure of 21 developing nations’ equities, weekly data compiled by Bloomberg show.

Traders moved 5.65 billion reais in stocks in Sao Paulo today data compiled by Bloomberg show. That compares with a daily average of 7.11 billion reais this year through April 12, according to data from the exchange.

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