Ibovespa Posts Weekly Decline as Stronger Currency Saps Gerdau

The Ibovespa declined for a second straight week as a stronger real dimmed the outlook for Brazilian exporters.

Gerdau SA, the nation’s largest steelmaker, dropped for a third day. Pulp producer Fibria Celulose SA posted its biggest weekly drop in two months. Beef producer Marfrig Global Foods SA gained the most on the benchmark stock index today after Banco BTG Pactual SA raised its recommendation to buy.

The Ibovespa declined 0.7 percent at 53,157.30, extending its weekly drop to 2.7 percent. The real rallied this week after the central bank said it will extend an intervention program for at least six months to support the currency.

“A stronger currency can be a negative factor for some companies that do a lot of business abroad, like Gerdau,” Pedro Galdi, the chief analyst at brokerage firm SLW Corretora, said by phone from Sao Paulo.

Gerdau, which gets about 45 percent of its sales in North America, lost 2.8 percent to 13.01 reais. Fibria retreated 1.6 percent to 21.60 reais, bringing its weekly slide to 7.5 percent.

Rossi Residencial SA added 3 percent to 1.71 reais, leading homebuilders higher after a report showed inflation in Brazil was slower than forecast this month.

Wholesale Prices

Wholesale, consumer and construction prices, as measured by the IGP-M index, fell 0.74 percent this month, the Getulio Vargas Foundation, an education and research institution based in Rio de Janeiro, said on its website today. That was the biggest drop since March 2009 and more than estimated by all 26 economists surveyed by Bloomberg, whose median forecast was for a 0.6 percent decline.

Marfrig gained 5.2 percent to 5.89 reais. The Sao Paulo-based company could benefit from a potential initial public offering of some of its units outside Brazil, BTG Pactual analysts Thiago Duarte and Enrico Grimaldi wrote in a research note.

The Ibovespa entered a bull market on May 7, surging 20 percent from this year’s low as Petroleo Brasileiro SA rallied on speculation a change in government will reduce intervention in state-run companies.

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