The Ibovespa fell the most among major emerging-market benchmarks as Rossi Residencial SA led homebuilders lower amid speculation Brazilian policy makers will step up the pace interest-rate increases to fight inflation.
Cia. de Bebidas das Americas, the brewer also known as AmBev, sank to a four-week low. The BM&FBovespa Real Estate Index retreated from a one-week high. MMX Mineracao & Metalicos SA, Eike Batista’s mining company, plunged the most on the Brazilian benchmark equity gauge.
The Ibovespa fell 1.5 percent to 51,429.48 at the close of trading in Sao Paulo with 60 of its 71 stocks lower. The gauge has gained 14 percent from this year’s low on July 3. The real weakened 1.3 percent to 2.3798 per dollar at 5:28 p.m. local time.
“Although the Ibovespa has gained quite a bit in the past few weeks, there hasn’t been any significant improvement in the outlook or the Brazilian economy to justify it,” Marc Sauerman, a portfolio manager at Curitiba, Brazil-based J. Malucelli Investimentos, said in a telephone interview. “The concerns about growth and inflation are still the same.”
Brazil’s central bank will increase the benchmark lending rate to 9.50 percent by the end of 2013, up from a previous forecast of 9.25 percent, according to a central bank survey of about 100 economists published today. The median estimate for 2014 inflation rose to 5.84 percent from 5.80 percent.
AmBev declined 1.3 percent to 81.69 reais. Rossi tumbled 6.3 percent to 2.81 reais, the worst performer on the BM&FBovespa Real Estate Index, which slipped 1.6 percent.
The Ibovespa earlier gained as much as 0.4 percent as Suzano Papel e Celulose SA led gains by some commodities exporters amid speculation that a weaker real will boost sales outside Brazil. The pulp maker, which gets about half of its revenue abroad, climbed 0.9 percent to 8.95 reais, the best performance on the MSCI Brazil/Materials index.
MMX lost 8.1 percent to 2.16 reais.
Brazil’s benchmark equity gauge trades at 13.4 times analysts’ earnings estimates for the next four quarters, compared with 10.3 for the MSCI Emerging Markets Index of 21 developing nations’ equities. Trading volume of stocks in Sao Paulo was 5.25 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.76 billion reais this year through Aug. 20, according to data compiled by the exchange.