Most Brazilian stocks fell as Rossi Residencial SA led homebuilders lower after traders raised bets on higher borrowing costs in Brazil.
Iron-ore producer Vale SA dropped to a five-week low as metals declined. Phone company Oi SA sank to a record before pricing shares in an offering that is part of its plan to merge with Portugal Telecom SGPS SA. Airline Gol Linhas Aereas Inteligentes SA rallied after saying a measure of profitability rose in March from a year earlier. Losses on the benchmark gauge were limited as Petroleo Brasileiro SA rose a three-week high.
The Ibovespa fell less than 0.1 percent to 51,383.68 at the close of trading in Sao Paulo, with 39 of its 73 members lower. The real rose 0.9 percent to 2.2226 per U.S. dollar at 5:21 p.m. local time. Swap rates, a gauge of expectations for interest-rate moves, climbed after Finance Minister Guido Mantega added to speculation that the central bank will keep raising borrowing costs when he ruled out more tax cuts on consumer goods to curb inflation.
“While inflation is still running high, measures to slow it could hurt an economy which is already weak, so this is a tough problem to solve,” Luis Gustavo Pereira, a strategist at brokerage Guide Investimentos, said by phone from Sao Paulo. “When it comes to the state of the economy, there’s nothing going on that’s positive for equities.”
Gross domestic product growth is forecast to slow to 1.65 percent this year from 2.28 percent in 2013, while consumer prices as measured by the IPCA index will increase 6.5 percent after rising 5.91 percent last year, according to the median estimates in a central bank survey of about 100 economists published today. Swap rates on the contract due in October 2014 rose 0.01 percentage point to 10.92 percent today.
Rossi sank 3.2 percent to 1.53 reais. The BM&FBovespa Real Estate Index dropped to a one-month low. Vale declined 2.7 percent to 26.75 reais. The Bloomberg Base Metals 3-Month Price Commodity Index dropped 0.6 percent.
Gol jumped 4 percent to 13.40 reais.
Petrobras, as the state-run oil producer Petroleo Brasileiro is known, gained 3.3 percent to 16.56 reais on speculation an MDA poll commissioned by the National Transport Confederation scheduled for release tomorrow may show reduced support for President Dilma Rousseff’s re-election bid.
“The market is anticipating tomorrow’s poll could show Dilma losing some points,” Ari Santos, an equity trading manager at H. Commcor, said by phone from Sao Paulo. “That helped push Petrobras higher today.”
Oi declined 5.6 percent to 2.37 reais. The Rio de Janeiro-based company is poised to move ahead with its merger with Portugal Telecom by completing a share sale today to raise at least 7 billion reais. The carrier has surpassed the minimum it needed from the capital increase, two people with direct knowledge of the deal told Bloomberg News on April 25.
The Ibovespa entered a bear market March 14 after falling 20 percent from its October high through that day. The gauge has since gained 14 percent as state-owned companies including Centrais Eletricas Brasileiras SA rebounded.
Trading volume of stocks in Sao Paulo on today was 5.18 billion reais, according to data compiled by Bloomberg. That compares with a daily average of 6.72 billion reais this year, according to data from the exchange.