• Protracted battle to impeach President Rousseff seen ahead
  • Consumer stocks index falls most among 10 industry groups

Brazilian stocks fell after posting the biggest rally in a month on speculation that the process to impeach President Dilma Rousseff, seen as a solution to end the political crisis that has paralyzed the country, may be longer and harder than initially expected.

The attempt to oust Rousseff, triggered by the lower house president Wednesday, may take months and involve several votes in Congress. Two of three motions to stop the impeachment process filed by president’s allies before the country’s top court were denied late Thursday, and speeches by political leaders for and against the proceeding signal a protracted battle ahead.

"Defenders of the impeachment scored one goal in the first minute of the first round of the game," Raphael Figueredo, an analyst at the brokerage Clear Corretora, said from Sao Paulo. "There’s still a lot that could happen along the way. We don’t know what the outcome will be, so much more volatility in the markets is expected."

The Ibovespa fell 1.6 percent to 45,640.62 at 11:00 a.m. in Sao Paulo as all except five of the 63 shares in the gauge declined. Lender Itau Unibanco Holding SA contributed the most to the benchmark index’s drop.  

Consumer stocks were the worst performers among 10 industry groups. For-profit college manager Estacio Participacoes SA fell the most on the MSCI Brazil Consumer Discretionary index.

Latin America’s biggest economy is heading toward its longest recession since the 1930s as Rousseff’s administration has struggled to push through fiscal changes she says are needed to reverse the biggest budget deficit in more than two decades and ward off further credit-rating cuts.

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