The Bovespa index tumbled the most among the world’s major equity gauges as a report showing retail sales unexpectedly dropped in February rekindled concern that Brazil’s economic recovery will falter.
Lojas Americanas SA led losses among retailers, sinking the most since August. Oil services provider Lupatech SA tumbled after missing a $6.79 million bond payment. OGX Petroleo & Gas Participacoes SA, the crude oil producer controlled by billionaire Eike Batista, declined to a record low.
The Bovespa fell 1.4 percent to 55,400.91 at the close of trading in Sao Paulo, the most in dollar terms among 94 major global stock measures tracked by Bloomberg. Fifty-four stocks dropped on the gauge while 14 advanced. The real dropped 0.1 percent to 1.9756 per dollar. The Standard & Poor’s 500 Index added 0.4 percent, and Mexico’s IPC rose 0.1 percent.
“In the beginning of 2012, many people were optimistic that growth would speed up and equities would rally, and they ended up disappointed,” Henrique Kleine, the head analyst at Magliano SA brokerage, said by phone from Sao Paulo. “Now there’s a risk of the same thing happening again. The government talks about growth between 3 percent and 4 percent this year, but we don’t know if they’ll deliver.”
Brazil’s retail sales fell 0.2 percent in February from a year earlier, the national statistics agency reported today. The median forecast of 27 analysts surveyed by Bloomberg was for a 3.5 percent increase. Sales declined 0.4 percent from the previous month.
The Getulio Vargas Foundation reported today that its IGP-M inflation index of wholesale, construction and consumer prices rose 0.42 percent from March 21 to March 31, the fastest pace since a 0.50 percent increase in late November.
While data point to a sluggish recovery, rising inflation will probably spur policy makers to increase interest rates soon, said Paulo Gala, a strategist at Fator Corretora.
“The market is pricing in that the tightening cycle is just about to start,” Gala said by phone from Sao Paulo. “The IGP-M figures came in worse than expected and were the last straw.”
A report from the national statistics agency showed consumer prices as measures by the IPCA index rose 6.59 percent in the year ending in March, exceeding the 6.50 limit set by the central bank.
Lojas Americanas fell 4.2 percent to 17.25, the most since August 15. Online retailer B2W Cia. Global do Varejo lost 4.1 percent to 13.97 reais. Lupatech sank 8.5 percent to 1.30 reais.
OGX tumbled 6.4 percent to 1.46 reais, extending this year’s plunge to 67 percent. Deutsche Bank AG’s analyst Marcus Sequeira, the stock’s most accurate analyst in a Bloomberg Absolute Return Ranking, today cut the target price for the company to 80 centavos from 2 reais.
The Bovespa has retreated 12 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 percent during the same period.
Brazil’s benchmark equity gauge trades at 11.2 times analysts’ earnings estimates for the next four quarters, compared with 10.5 for the MSCI Emerging Markets Index of 21 developing nations’ equities, data compiled by Bloomberg show.
Trading volume for stocks in Sao Paulo was 6.51 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.43 billion reais this year through April 8, according to data compiled by the exchange.