- Oil producer Petrobras sank to lowest level since 1999
- Frozen food maker JBS was the worst performer, falling 7.3%
Brazil’s stocks fell to an almost seven-year low as concern that growth is slowing in China, the South American nation’s biggest trading partner, added to estimates the domestic economy will contract further this year and next.
State-controlled oil producer Petroleo Brasileiro SA sank to the lowest since November 1999. JBS SA was the worst performer after Brazil’s public prosecutor accused executives at the frozen food maker of financial crimes involving loans.
Brazil’s economy is forecast to shrink 3 percent this year, according to a weekly Central Bank survey released Monday, when the local exchange was closed because of a holiday in Sao Paulo. That compares with a previous estimate for a 2.99 percent drop. The economists also cut their forecast for 2017 to a 0.8 percent growth from 1 percent.
"Investors are running to safer assets at a time when both international and domestic news is so negative for Brazil," Raphael Figueredo, an analyst at the brokerage Clear Corretora, said from Sao Paulo.
The Ibovespa slid 1.4 percent to 37,497.48 at the close of trading in Sao Paulo, the lowest level since March 2009. Petrobras, as Petroleo Brasileiro is known, declined 4.8 percent while JBS plunged 7.3 percent.
Brazil’s benchmark stock index has slumped 14 percent this year, joining a global rout, as the country heads toward its worst recession since at least 1901 amid a widening corruption scandal. To make things worse, China’s gross domestic product growth is seen slowing further to 6.5 percent this year, from last year’s 6.9 percent. Material producers account for about 20 percent of Ibovespa’s weighting.