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Ibovespa Falls as Commodity Producer Drop Outweighs Bank Rally

The Ibovespa declined for a fourth consecutive day in its longest losing streak since November as steelmaker Cia. Siderurgica Nacional SA led losses among commodity producers.

Iron-ore producer Vale SA fell to a five-month low. The MSCI Brazil/Materials Index was the worst performer among 10 industry groups. Banco Bradesco SA led financial stocks higher on speculation that tighter monetary policy will allow banks to raise rates charged on loans.

The Ibovespa fell 0.3 percent to 48,542.07 at the close of trading in Sao Paulo, with 35 of its 72 members lower. The real lost 0.7 percent to 2.3602 per U.S. dollar at 5:19 p.m. local time. The Brazilian benchmark stock gauge slumped yesterday to the lowest closing level since August after data showed China’s gross domestic product expanded 7.7 percent in the fourth quarter from a year earlier, slower than the 7.8 percent seen in the previous three-month period.

“Investors seem worried about a deeper slowdown in China,” Pedro Galdi, the head strategist at SLW Corretora in Sao Paulo, said in a phone interview. “Every little thing that happens in China has a big impact on Brazil, which depends a lot on commodities exports.”

CSN, as Siderurgica Nacional is known, lost 7.5 percent to 12.66 reais. Vale dropped 2.4 percent to 28.48 reais.

Voting shares of Bradesco advanced 1.9 percent to 29.48 reais. Swap rates, a gauge of expectations for interest-rate moves, rose on most contracts on speculation that a weaker currency will fuel inflation.

“Banks such as Bradesco and Itau have a lot of experience in dealing with times when interest rates are rising, as they’re able to pass on the increase,” Rodolfo Amstalden, an analyst at Empiricus Research, said in a phone interview from Sao Paulo.

Default Rates

Falling delinquency rates also help to boost the prospects for Brazilian lenders, Amstalden said. Consumer credit default rates fell 6.5 percent in December from a year earlier, according to a report today from Serasa Experian, a consumer-credit rating firm.

The Ibovespa has tumbled 14 percent from a bull-market high on Oct. 22 as inflation exceeded policy makers’ target for a third consecutive year and concern mounted that higher government spending will lead to a reduction in the country’s credit rating.

Trading volume of stocks in Sao Paulo was 5.93 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 6.13 billion reais this month, according to data from the exchange.

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