The Bovespa index declined to an eight-month low after homebuilder Tecnisa SA posted a wider-than-forecast loss, rekindling concern about the industry’s earnings outlook.
Brookfield Incorporacoes SA was the worst performing stock among real-estate companies on the Bovespa index. Vale SA, the world’s largest iron-ore producer, followed metals lower amid concern that Chinese demand for raw materials will falter. Cia. Energetica de Sao Paulo, the power company known as Cesp, fell after reporting fourth-quarter sales that missed estimates.
The Bovespa retreated 0.7 percent to 54,873.12 at the close of trading in Sao Paulo, the lowest since July 26. Forty-six stocks fell on the gauge while 18 rose. The real weakened 0.2 percent to 2.0128 per dollar.
“The real-estate sector is one of the negative highlights in this earnings season, as companies struggled to make their business profitable in a scenario of slower economic growth,” Fausto Gouveia, who helps manage 380 million reais at Legan Administracao de Recursos, said in a phone interview.
Tecnisa fell 2.1 percent to 8.32 reais after posting an adjusted loss of 180.1 million reais in the three months ending in December, which compares with an average forecast for a loss of 650,000 reais, according to data compiled by Bloomberg. Thirty-four of 50 companies on the Bovespa index that have already reported earnings missed estimates, according to data compiled by Bloomberg.
Brookfield lost 5.5 percent to 2.39 reais. MRV Engenharia & Participacoes SA dropped 0.7 percent to 8.64 reais. Helbor Empreendimentos SA fell 3.5 percent to 12.69 reais.
Cesp fell 1 percent to 19.55 reais.
Vale fell 1.7 percent to 32.64 reais as the Bloomberg Base Metals 3-Month Price Commodity Index lost 0.6 percent amid speculation that China’s government will take steps to tame inflation, which could curb demand.
LLX Logistica SA, Eike Batista’s port developer, jumped 5.2 percent to 2.02 reais after the billionaire said in March 23 posts on his Twitter account that short sellers will be “caught with their pants down.”
Batista’s oil unit, OGX Petroleo & Gas Participacoes SA, rose 0.9 percent to 2.29 reais after earlier losing as much as 4.4 percent.
The Bovespa has retreated 13 percent from this year’s high on Jan. 3 amid concern accelerating inflation may curb Brazil’s economic recovery and the government’s interventionist policies will hurt profits in industries including utilities and energy. The MSCI BRIC Index of shares in Brazil, Russia, India and China has lost 7.1 percent over the same period.
Brazil’s benchmark equity gauge trades at 11.1 times analysts’ earnings estimates for the next four quarters, compared with 10.7 for the MSCI Emerging Markets Index of 21 developing nations’ equities, data compiled by Bloomberg show.
Trading volume for stocks in Sao Paulo was 6.16 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.67 billion reais this year through March 18, according to data compiled by the exchange.