Bovespa Drops to 11-Week Low as B2W Falls on Brazil Growth View

The Bovespa index fell to an 11-week low as economists covering Brazil reduced their 2014 growth forecasts, rekindling concern that a slower recovery will hurt corporate earnings.

Retailer B2W Cia. Global do Varejo dropped the most in four months, leading declines by companies that depend on domestic demand. Steelmaker Usinas Siderurgicas de Minas Gerais SA tumbled to the lowest since Oct. 26 as metals fell amid signs of slower growth in China. OGX Petroleo & Gas Participacoes SA was the worst performer on the index, falling for a fourth day as oil retreated.

The Bovespa declined 0.5 percent to 57,613.90, the lowest closing level since Dec. 4. Forty-six stocks sank on the gauge while 21 advanced. The real strengthened 0.3 percent to 1.9633 per dollar.

“If the economy takes longer than expected to recover, we’ll probably start to see corporate earnings getting weaker and weaker, which would mean share prices would have to go through some adjustments,” Clodoir Vieira, an economist at Sao Paulo-based brokerage Souza Barros Corretora, said in a phone interview.

Brazil’s gross domestic product will expand 3.65 percent next year, according to the median forecast of about 100 economists in a central bank weekly survey released today. That compares with an estimate of 3.8 percent a week earlier. The growth outlook is 3.08 percent for 2013, down from 3.09 percent a week earlier.

B2W, Pao de Acucar

B2W lost 5.9 percent to 13.25 reais, the biggest one-day drop since Oct. 18. The MSCI Brazil/Consumer Discretionary Index slid 1 percent.

Cia. Brasileira de Distribuicao Grupo Pao de Acucar, Brazil’s biggest retailer, climbed 0.8 percent to 95.20 reais after it was rated buy in new coverage at Banco Espirito Santo de Investimento SA.

Usiminas, as Usinas Siderurgicas is known, retreated 3.4 percent to 9.80 reais. The Bloomberg Base Metals 3-Month Price Commodity Index tumbled 1.5 percent as a report from the Ministry of Commerce showed that retail sales in China gained at the slowest pace since 2009 during last week’s Lunar New Year festival.

Real estate developer Multiplan Empreendimentos Imobiliarios SA gained 1.5 percent to 55.51 reais. The company posted adjusted net income of 128.5 million reais in the fourth quarter, which compares with an average forecast of 95 million reais, according to data compiled by Bloomberg.

LLX Gains

LLX Logistica SA, the port developer controlled by billionaire Eike Batista, gained 0.5 percent to 2.02 reais after announcing an agreement with ASCO Group Ltd. to provide services at its Acu complex in Rio de Janeiro.

The Bovespa has dropped 9 percent from this year’s high on Jan. 3 amid concern that accelerating inflation may curb Brazil’s economic recovery and that the government’s interventionist policies will hurt profits in industries including utilities and energy.

Brazil’s benchmark equity gauge trades at 10.8 times analysts’ earnings estimates for the next four quarters, compared with 10.3 for MSCI’s measure of 21 developing nations’ equities, data compiled by Bloomberg show.

Trading volume for stocks in Sao Paulo was 5.13 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.46 billion reais this year through Feb. 14, according to data compiled by the exchange.