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Ibovespa Retreats as Petrobras Declines on Fuel Price Outlook

Sept. 12 (Bloomberg) -- The Ibovespa fell to a one-week low as oil producer Petroleo Brasileiro SA sank after saying it doesn’t expect to raise fuel prices and Brazilian commodity exporters dropped on concern that global growth is faltering.

Meatpacker JBS SA, which gets about 73 percent of its revenue from North America, dropped the most on the gauge. Losses on the benchmark were limited as clothing seller Cia. Hering led consumer stocks higher after a report showed retail sales in Brazil increased more than forecast.

The Ibovespa fell 0.5 percent to 53,307.09 at the close of trading in Sao Paulo with 47 stocks lower and 25 higher. Petrobras, as Petroleo Brasileiro is also known, contributed the most to the index’s decline after Chief Executive Officer Maria das Gracas Foster said yesterday that the state-controlled company hasn’t received any signs from the government that a fuel-price increase is being planned.

“The remarks from Petrobras’s CEO are pushing the stock lower,” Fausto Gouveia, who helps manage 440 million reais at Sao Paulo-based Legan Administracao de Recursos, said in a phone interview. “There were also some negative figures coming from Europe, which makes investors more cautious and pushes the Ibovespa lower.”

The Bloomberg Base Metals 3-Month Price Commodity Index lost 0.5 percent as reduced industrial production and higher unemployment from Germany to Australia fueled concern that economies are still struggling. The real was little changed at 2.2745 per dollar at 5:29 p.m. local time.

Bull Market

Brazil’s benchmark equity index entered a bull market on Sept. 9 after rising 20 percent from this year’s low on July 3 through that day. The gauge is still down 22 percent in dollar terms this year, compared with a decline of 6.1 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Petrobras fell 2.2 percent to 17.85 reais today. JBS slumped 5 percent to 7.60 reais.

Hering added 1.7 percent to 33.53 reais. Brazil’s retail sales rose 1.9 percent in July from a month earlier, the national statistics agency said today. The median estimate among economists surveyed by Bloomberg was for an increase of 0.2 percent.

BM&FBovespa SA fell 2.1 percent to 12.36 reais. The exchange said yesterday it will change the Ibovespa’s methodology so that stocks on the gauge can be weighted by the market value of their float instead of trading volume. The new criteria will be fully implemented in May 2014, according to a statement late yesterday.

Trading volume of stocks in Sao Paulo was 7.15 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.73 billion reais this year through Sept. 6, according to data compiled by the exchange.

To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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