Ibovespa Slides to Lowest Level in Three Weeks as Vale Declines

The Ibovespa fell to a three-week low as iron-ore producer Vale SA paced losses in exporters of raw materials after the price of metals retreated.

Steelmaker Usinas Siderurgicas de Minas Gerais SA slid to its lowest level since July. Embraer SA rose after signing a contract with the Brazilian government to deliver 28 aircraft valued at 7.2 billion reais ($3.3 billion). State-run oil producer Petroleo Brasileiro SA contributed most to the benchmark gauge’s drop.

The stock index retreated 1.8 percent to 52,366.19 at the close of trading in Sao Paulo, erasing an advance of 0.9 percent. Sixty-five stocks on the gauge declined while five rose. The real lost 0.5 percent to 2.2173 per U.S. dollar at 5:23 p.m. local time.

“We’ve seen commodities prices falling this week, and that’s negative for Brazilian exporters,” Antonio Goes, a senior analyst at brokerage firm TOV Corretora, said by telephone from Rio de Janeiro. “But we should have more volatility in the market.”

Vale fell 2.3 percent to 26.03 reais. Usinas Siderurgicas, or Usiminas, decreased 4.3 percent to 8.16 reais. The Bloomberg Base Metals 3-Month Price Commodity Index dropped 0.6 percent. Commodity producers account for about a third of the Ibovespa’s weighting, according to data compiled by Bloomberg.

Petrobras, as Petroleo Brasileiro is known, slumped 3.6 percent to 17.30 reais. Embraer added 0.7 percent to 18.75 reais.

The Ibovespa entered a bull market on May 7, when it completed a 20 percent gain from a March 14 low, as Petrobras climbed on speculation a change in government will reduce intervention in state-run companies.

Trading volume of stocks in Sao Paulo was 7.5 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 6.7 billion reais this year, according to data from the exchange.

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