Ibovespa Falls as Brazilian Exporters Decline on Growth OutlookNey Hayashi
The Ibovespa dropped to a one-week low as Brazilian commodity exporters including iron-ore producer Vale SA sank amid concern that a budget impasse in the U.S. may squelch global economic growth.
OGX Petroleo e Gas Participacoes SA, the oil producer founded by Eike Batista, tumbled the most on the benchmark gauge after two people who asked not to be identified said the company is considering filing for bankruptcy within a month Telefonica Brasil SA declined to a one-month low after Credit Suisse Group AG lowered its recommendation on the phone company to the equivalent of hold.
Brazil’s main equity gauge sank 0.8 percent to 52,417.10 at the close of trading in Sao Paulo, with 40 stocks lower and 32 higher. The real gained 0.2 percent to 2.2073 per dollar at 5:18 p.m local time. The MSCI All-Country World Index fell 0.6 percent.
“Investors are apprehensive about the risks the impasse in the U.S. brings to the global recovery,” Luciano Rostagno, the chief strategist at Banco Mizuho do Brasil in Sao Paulo, said in a telephone interview. “People are turning away from riskier assets such as equities. With global stocks falling, the Ibovespa follows.”
With the U.S. set to exhaust measures to avoid breaching its debt ceiling on Oct. 17, House of Representatives Speaker John Boehner said lawmakers won’t raise the limit without packaging it with other provisions. President Barack Obama’s administration has said it won’t negotiate with Republicans over funding the government or raising the debt ceiling.
An OGX bankruptcy filing would be carried out in Rio de Janeiro, where the company is based, said two people with direct knowledge of the matter, asking not to be identified because discussions are private. Shares slid 13 percent to 20 centavos. OGX declined to comment in an e-mailed response to questions.
Vale fell 1.6 percent to 31.39 reais. Telefonica Brasil tumbled 2.1 percent to 47.21 reais.
Lojas Renner SA advanced 1.9 percent to 64.09 reais, leading gains in retailers, after economists in a weekly central bank survey published today raised their forecasts for 2013 growth to 2.47 percent to 2.40 percent.
“It’s not like all the country’s problems were solved, but there’s reason to be less pessimistic about Brazil,” Marc Sauerman, a portfolio manager in Curitiba, Brazil, at J. Malucelli Investimentos, said in a telephone interview.
Consumer products maker Hypermarcas SA advanced 1.7 percent to 18.40 reais. Homebuilder MRV Engenharia e Participacoes SA gained 1.6 percent to 9.46 reais.
The Ibovespa entered a bull market Sept. 9 after rising 20 percent from this year’s low on July 3 through that day. The gauge is still down 20 percent in dollar terms this year, compared with a decline of 4.8 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.
Trading volume of stocks in Sao Paulo today was 4.9 billion reais, according to data compiled by Bloomberg. That compares with a daily average of 7.64 billion reais this year through Oct. 3, according to data from the exchange.