Brazil's Stocks Halt Two-Day Rally as Petrobras Sinks on Strike

  • JBS, Renner advance as valuations seen as attractive
  • Petrobras says workers's strike is curbing oil and gas output

The Ibovespa dropped for the first time in three days as state-run oil producer Petroleo Brasileiro SA slumped after saying that a strike is cutting its output.

Energy shares on the MSCI Brazil Index sank the most among 10 industries. Vale SA, the world’s largest iron ore producer, followed commodities lower. Meatpacker JBS SA and retailer Lojas Renner SA gained amid speculation that investor sentiment is picking up as Brazil’s beat-up assets lure buyers. The Ibovespa on Tuesday posted its biggest rally in more than 11 months.

“Petrobras is in a tough situation, with the strike adding to concern that output will drop,” said Ari Santos, a trader at brokerage H.Commcor. “After yesterday’s gains in the equity market, we also see some profit-taking happening.”

The Ibovespa fell 0.7 percent to 47,710.10 at the close of trading in Sao Paulo. The index rose as much as 2.1 percent, following a rally of 4.8 percent yesterday.

Frozen-dinner market BRF SA declined 3.3 percent, bringing its four-day loss to 19 percent, after reporting lower-than-expected third-quarter sales amid “extremely challenging” economic conditions in the country.

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