Petrobras Declines With Oil as Greece’s ‘No’ Vote Sinks Ibovespa

Updated on

Petroleo Brasileiro SA slumped to a 12-week low as crude prices tumbled, adding to declines on the Ibovespa as Greece’s rejection of austerity prompted investors to flee riskier assets worldwide.

Crude sank the most since February, dropping 7.3 percent to $52.78 a barrel in New York. The Standard & Poor’s GSCI gauge of commodities lost 4.9 percent, fueling declines in raw-materials producers like Vale SA that make up about a fourth of the Ibovespa’s weighting.

“The main consequence of Greece’s ‘no’ for Brazil is the impact of a strong dollar, knocking down commodities,” Marcelo Ribeiro, a strategist at the consultant Post-Bric, wrote in an e-mailed response to questions.

Brazil’s benchmark equity index fell 0.7 percent to 52,149.37 at the close of trading in Sao Paulo. Petrobras dropped 2.1 percent to 11.48 reais, following an 11 percent slide last week.

Voters in a Sunday referendum in Greece said no to an austerity program meant to keep the country in the euro area. While less than 0.1 percent of Brazil’s exports went to Greece last year, some of its biggest markets are those most vulnerable to a fallout from the Greek crisis. About 19 percent of goods sent abroad went to the European Union, and 56 percent went to emerging markets.

“Risk aversion is spread all over the world today,” Raphael Figueredo, an analyst at brokerage Clear Corretora, said in a phone interview from Sao Paulo.

Shopping-mall operator Multiplan Empreendimentos Imobiliarios SA paced losses among real-estate companies as economists forecast a deeper contraction in Brazil this year. Gross domestic product will probably shrink 1.5 percent in 2015, according to the median estimate among 100 economists in a weekly survey by the central bank. That compares with a previous forecast for a 1.49 percent contraction.

Steelmakers Rally

Usiminas Siderurgica de Minas Gerais SA, known as Usiminas, led steelmakers higher after Brazil’s carmakers association said vehicle exports soared 97 percent in June from a year earlier.

“A little good news gives steelmakers some breathing room after losing a lot recently,” Victor Penna, an analyst at BB Investimentos, said from Sao Paulo. “An increase in external car sales helps steelmakers, but that’s not a change in trend for them. With low demand and falling steel prices, prospects for the companies are bad as far as we can see.”

Usiminas advanced 3.7 percent to 4.18 reais, trimming this year’s drop to 17 percent. Gerdau SA rose 2.3 percent to 6.81 reais and Cia. Siderurgica Nacional SA rose 2.1 percent.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE