The Ibovespa posted its biggest weekly drop in two months as consumer stocks declined after retailer Cia. Hering posted third-quarter earnings that trailed analysts’ estimates.
Oil company OGX Petroleo e Gas Participacoes SA tumbled after Valor Economico reported that a round of talks with bondholders ended Oct. 23 with no agreement reached. Planemaker Embraer SA led exporters lower as a stronger real dimmed the outlook for sales outside Brazil.
The Ibovespa fell 1.3 percent to 54,154.15 at the close of trading in Sao Paulo. The gauge slid 2.2 percent this week. The real gained 0.7 percent to 2.1879 per dollar at 5:27 p.m. local time after Brazil’s central bank said it will hold auctions over three days next week to extend maturities on currency swaps supporting its rally.
“Some companies have reported earnings that weren’t very inspiring, which is weighing on the market a bit,” Luis Gustavo Pereira, a strategist at Futura Corretora brokerage in Sao Paulo, said in a phone interview. “The Ibovespa is also very vulnerable to whatever happens to OGX, and today the news is negative.”
Tobacco company Souza Cruz SA and cosmetics maker Natura Cosmeticos SA earlier this week reported profits that missed estimates, pushing stocks lower, said Pereira.
Natura fell 0.6 percent to 45.14 reais today, extending its decline since Oct. 18 to 7.6 percent, the steepest weekly drop in three years.
Hering slipped 0.9 percent to 32.20 reais. The retailer posted adjusted net income of 58.3 million reais in the third quarter, which compares with an average estimate of 62.7 million reais, according to data compiled by Bloomberg.
OGX, the fifth-heaviest weighted stock on the Ibovespa, slumped 19 percent to 29 centavos. The company’s press office didn’t respond to a phone call from Bloomberg News seeking comment on Valor’s report.
Embraer lost 2.5 percent to 17.64 reais.
State-controlled Banco do Brasil SA rose 1.2 percent to 28.67 reais after Brazil granted the lender permission to have as much as 30 percent of its shares held by foreign investors, up from a previous limit of 20 percent. The change will help to boost trading on the stock, Chief Financial Officer Ivan de Souza Monteiro said in a phone interview.
Brazil’s benchmark equity index entered a bull market Sept. 9 after rising 20 percent from this year’s low on July 3 through that day. The gauge is still down 17 percent in dollar terms this year, compared with a decline of 2.7 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.
Trading volume of stocks in Sao Paulo today was 5.53 billion reais, according to data compiled by Bloomberg. That compares with a daily average of 7.61 billion reais this year through Oct. 22, according to data from the exchange.