The Ibovespa fell the most among major benchmarks in the Western Hemisphere as data showed the Brazilian economy slowed and as a drop in commodities dimmed the outlook for the country’s raw-materials exporters.
Mining company Vale SA slumped the most in six weeks after iron ore declined to a 20-month low. Airline Gol Linhas Aereas Inteligentes SA was the worst performer among companies that depend on domestic demand. Marfrig Global Foods SA, the second-biggest Latin American beef producer by market value, rallied the most on the index after Citigroup Inc. recommended buying the stock.
The Ibovespa fell 1.9 percent to 51,239.34 at the close of trading in Sao Paulo, its lowest level since April 16, and extended its second straight weekly decline to 2.6 percent. The real lost 0.7 percent to 2.2401 per dollar at 5:34 p.m. local time. The Standard & Poor’s GSCI Index of 24 raw materials retreated 0.7 percent. Commodity producers account for about one-third of the Ibovespa’s weighting.
“This sharp decline in commodities prices is terrible for Brazilian exporters, especially for Vale,” Pedro Galdi, the chief analyst at the brokerage firm SLW Corretora, said in a phone interview from Rio de Janeiro. “And the companies that sell in the domestic market aren’t in a better situation, given this weak growth.”
Brazil’s gross domestic product increased 1.9 percent in the first quarter of this year from the same period in 2013, trailing the median estimate of analysts surveyed by Bloomberg for 2 percent growth. The economy expanded 0.2 percent from the prior quarter, half the pace of the previous three months.
Vale fell 3.8 percent to 25.64 reais, the lowest since 2009, after benchmark iron ore prices tumbled 4.1 percent to $91.80 a dry ton, the lowest level in 20 months, according to data from The Steel Index Ltd. today.
Iron ore is down 32 percent this year, entering a bear market in March as the biggest miners raised output, spurring forecasts for a rising global surplus while slowing growth in China capped demand.
Gol slumped 5.9 percent to 13.17 reais, the biggest one-day decline since October.
Marfrig climbed 4.1 percent to 5.30 reais, its highest price since Oct. 22. Analysts at Citigroup led by Alexander Robarts raised the recommendation on the meatpacker to buy from the equivalent of hold, citing productivity gains and expectations for higher sales with the World Cup in Brazil, according to a note to clients dated yesterday.
The Ibovespa entered a bull market on May 7, surging 20 percent from this year’s low on March 14, as Petroleo Brasileiro SA rallied on speculation a change in government will reduce intervention in state-run companies.
Trading volume of stocks in Sao Paulo was 8.94 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 6.6 billion reais this year, according to data from the exchange.