Bovespa-Futures Drop as Manufacturing Forecasts Are Cut

Bovespa-index futures dropped amid rekindled concern that Brazil’s sluggish economic recovery will hurt corporate earnings after economists lowered forecasts for growth in the country’s manufacturing industry.

JBS SA, the world’s biggest beef producer, may move after JPMorgan Chase & Co. raised its recommendation to the equivalent of buy. Power utility Cia. Energetica de Minas Gerais may be active after Brazil’s regulator Aneel said the company will increase electricity rates by 2.99 percent starting today.

Bovespa-index futures contracts expiring this month fell 0.1 percent to 55,050 at 9:19 a.m. in Sao Paulo. The real climbed 0.3 percent to 1.9801 per dollar. The Standard & Poor’s GSCI index of 24 raw materials advanced 0.9 percent after a report showed Germany’s industrial production increased 0.5 percent in February from January, when it contracted 0.6 percent.

Economists covering Brazil lowered their forecasts for manufacturing growth this year, according to a central bank survey. Industrial production will grow 3 percent, down from an estimate of 3.12 percent one week earlier, the survey released today showed.

The Bovespa has retreated 13 percent from this year’s high on Jan. 3 amid concern accelerating inflation may curb Brazil’s economic recovery and the government’s interventionist policies will hurt profits in industries including utilities and energy. The MSCI BRIC Index of shares in Brazil, Russia, India and China has lost 8.7 percent over the same period.

Brazil’s benchmark equity gauge trades at 11 times analysts’ earnings estimates for the next four quarters, compared with 10.3 for the MSCI Emerging Markets Index of 21 developing nations’ equities, data compiled by Bloomberg show.

Trading volume for stocks in Sao Paulo was 7.69 billion reais ($3.87 billion) on April 5, which compares with a daily average of 7.45 billion reais this year through April 4, according to data compiled by the exchange.