Bovespa Index Posts Longest Slump in Nine Months as Vale Drops

The Bovespa index fell for a sixth day, its longest losing streak in nine months, after a gauge of Brazil’s economy rose less than forecast and as mining company Vale SA followed commodities prices lower.

MPX Energia SA dropped after a person with direct knowledge of the matter said controlling shareholder Eike Batista is seeking to raise more than $5 billion by selling a controlling stake in the company and his gold business. Exchange operator BM&FBovespa SA tumbled after fourth-quarter earnings trailed analysts’ estimates. PDG Realty SA Empreendimentos e Participacoes led declines among real estate companies.

The Bovespa fell 2 percent to 56,177.60 at the close of trading in Sao Paulo, extending this year’s drop to 7.8 percent. That compares with a gain of 6 percent for the Standard & Poor’s 500 Index and a 1.1 percent advance in the MSCI Emerging Markets Index. Brazil’s benchmark has declined on concern accelerating inflation will curb the economic recovery.

“I still can’t see an improvement in this scenario,” Fernando Goes, an analyst at brokerage Clear Corretora in Sao Paulo, said in a phone interview. “The external moves are having little relevance for the Bovespa. We’re living a local trend, which is much worse.”

Raw-material producers, accounting for 23 percent of the Bovespa’s weighting, dropped the most on the gauge as the S&P GSCI index of commodities fell 1.1 percent.

Vale retreated 3.6 percent to 34.80 reais, contributing most the stock benchmark’s decline. MPX fell 6.4 percent to 9.99 reais. BM&FBovespa slipped 2.8 percent to 13.15 reais.

Pao de Acucar Gains

PDG declined 5.8 percent to 2.91 reais, the biggest drop on the benchmark gauge.

Grupo BTG Pactual rose 0.5 percent to 36.25 reais. The lender’s adjusted net income was above the average estimate of analysts surveyed by Bloomberg.

Cia Brasileira de Distribuicao Grupo Pao de Acucar, Brazil’s biggest retailer, advanced 1.5 percent to 97.80 reais after posting net income of 539 million reais in the fourth quarter, beating estimates of 435.8 million reais.

Most swap rates dropped after the central bank reported that its economic activity index increased 0.26 percent in December from a month earlier, compared with growth of 0.57 percent in November. The median forecast of 15 analysts surveyed by Bloomberg was for a 0.30 percent expansion. The real depreciated 0.3 percent to 1.9621 per U.S. dollar.

The Bovespa trades at 10.6 times analysts’ earnings estimates for the next four quarters, compared with 10.5 for MSCI’s measure of 21 developing nations’ equities, data compiled by Bloomberg show.

Trading volume of stocks in Sao Paulo was 8.21 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.45 billion reais this year through Feb. 15, according to data compiled by the exchange.

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