Brazilian Stocks Drop on Quickening Inflation, Korea Conflict

Brazil’s Bovespa stock index fell, capping the biggest two-day drop since June, as North Korea fired artillery shells into South Korea and quickening inflation raised speculation policy makers will increase borrowing costs.

MRV Engenharia e Participacoes SA and PDG Realty SA Empreendimentos & Participacoes led a tumble for homebuilders after mid-month consumer prices rose more than expected. MMX Mineracao e Metalicos SA, the iron ore company controlled by billionaire Eike Batista, sank 5.2 percent as metals prices fell. Telemar Participacoes SA dropped after saying BNDES Participacoes SA sold 396 million of its common shares in the company, equivalent to 14.5 percent of that share class.