The Bovespa stock index fell to a two-month low as pulpmaker Suzano Papel & Celulose SA led declines by commodity exporters as the real surged after the central bank said inflation requires attention.
Suzano, which gets more than half its sales from exports, and competitor Fibria Celulose SA were among the biggest decliners on the gauge. Iron-ore producer Vale SA posted the steepest one-day drop since Nov. 16, contributing the most to the benchmark’s decline. OGX Petroleo & Gas Participacoes SA rose from a four-year low.
The Bovespa dropped 1 percent to 58,372.46 at the close of trading in Sao Paulo. Fifty-four stocks declined on the gauge while 14 rose. The real rallied 1.2 percent to 1.9667 per dollar, extending gains on comments from a central bank board member.
“When the dollar fell, Vale dropped and dragged exporters down,” Ari Santos, a manager at Sao Paulo-based brokerage H.Commcor, said by phone. “Exporters are left hanging.”
Vale, which is the heaviest-weighed stock on the gauge, fell 2.7 percent to 37.46 reais. The Bloomberg Base Metals 3-Month Index fell 0.4 percent.
Fibria, the world’s largest pulp maker, slumped 3.3 percent to 24.35 reais while Suzano fell 5.4 percent to 6.80 reais.
Consumer prices as measured by the IPCA index rose 0.86 percent in January, the fastest pace in almost eight years, the national statistics agency said today. The 12-month inflation rate will be about 6 percent until June before slowing, the central bank board member said in a phone interview, asking not to be identified in accordance with internal policy.
The Standard & Poor’s 500 Index retreated 0.4 percent at 3:03 p.m. in New York as U.S. worker productivity fell in the fourth quarter more than projected, pushing labor expenses up. European Central Bank President Mario Draghi told reporters growth risk continues to be on the “downside.”
“The economic data and Draghi’s speech, coupled with how weak the market has been, ended up pushing stocks down,” Pedro Galdi, the chief strategist at SLW Corretora, said in a phone interview from Sao Paulo.
OGX climbed 1.9 percent to 3.78 reais, rebounding from the lowest level since Dec. 2008.
The Bovespa entered a bull market on Jan. 3 after rising 21 percent from last year’s low on June 5 as stimulus from central banks around the world eased concern that economic growth might miss expectations while borrowing costs at a record low in Brazil boosted equity demand. The index has since pared its advance to 11 percent.
Brazil’s benchmark equity gauge trades at 10.7 times analysts’ earnings estimates for the next four quarters, compared with 9.7 for MSCI’s measure of 21 developing nations’ equities, data compiled by Bloomberg show.
Trading volume for stocks in Sao Paulo was 8.3 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.36 billion reais this year through Feb. 5, according to data compiled by the exchange.