The Ibovespa fell the most in three weeks as Brazilian exporters including iron-ore producer Vale SA tumbled with commodity prices.
Steelmaker Cia. Siderurgica Nacional SA sank a second day. Banco Santander Brasil SA led declines among banks. Cosmetics maker Natura Cosmeticos SA climbed to the highest since May as some companies that rely on domestic demand gained after a report showed that Brazil’s annual inflation slowed in mid-September to below 6 percent for the first time in nine months.
The Ibovespa dropped 1.8 percent to 54,110.03 at the close of trading in Sao Paulo, paring a weekly gain to 0.6 percent. Brazil’s benchmark equity gauge rose 2.6 percent on Sept. 18 after the Federal Reserve unexpectedly maintained a U.S. stimulus program that has helped boost demand for emerging-market assets. The real weakened 0.5 percent to 2.2123 at 5:30 p.m. local time, cutting a weekly advance to 3.1 percent.
“We’re still in the hangover after the Fed’s decision two days ago,” Luis Gustavo Pereira, the head strategist at the brokerage Futura Corretora, said in a phone interview from Sao Paulo. “Uncertainty about the U.S. stimulus program boosted commodities prices and Brazilian raw-materials producers for some weeks, and now investors are adjusting prices and expectations to a new scenario.”
Sixty-five of the benchmark index’s 73 member stocks declined today. The Standard & Poor’s GSCI Index of 24 raw materials fell 0.7 percent. Commodity producers account for 39 percent of the Ibovespa’s weighting.
Banco Santander Brasil sank 2.9 percent to 14.24 reais as the MSCI Brazil/Financials Index dropped the most since Aug. 27. Vale fell 0.7 percent to 32.37 reais. CSN, as Siderurgica Nacional is also known, slid 1.6 percent to 9.29 reais.
OGX Petroleo e Gas Participacoes SA, the oil producer founded by Eike Batista, fell 5 percent to 38 centavos. JPMorgan Chase & Co. reduced its recommendation on the company’s dollar bonds to sell from hold, saying the company probably won’t make a scheduled payment next month.
Natura added 1.3 percent to 50.65 reais.
Consumer prices in Brazil climbed 5.93 percent in the 12 months through mid-September compared with 6.15 percent a month earlier, according to the national bureau of statistics. The median estimate of 24 economists surveyed by Bloomberg was for a 5.94 percent increase.
“The Fed’s decision should have a bigger impact on the real, which has strengthened a lot this week, and because of that prices are expected to retreat further,” Fernando Goes, an analyst at Sao Paulo-based brokerage Clear Corretora, said in a phone interview. “That movement is very positive for consumer stocks.”
Brazilian swap rates on the contract due in January 2015 dropped seven basis points, or 0.07 percentage point, to 10.05 percent today.
The Ibovespa 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 18 percent in dollar terms this year, compared with a decline of 4 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.
Trading volume of stocks in Sao Paulo was 6.23 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.75 billion reais this year through yesterday, according to data compiled by the exchange.