Most Brazilian Stocks Decline as Oi Slump Overshadows Vale Gain

Most Brazilian stocks fell as a slump in phone company Oi SA overshadowed an advance by commodities producers including Vale SA.

The MSCI Brazil/Telecommunication Services Index dropped to four-week low. Health-insurance company Qualicorp SA slid as Bank of America Corp. cut its recommendation on the stock to the equivalent of hold.

The Ibovespa was little changed at 53,171.49 at the close of trading in Sao Paulo, with 41 of its 71 stocks down. The gauge rose earlier as data showing a manufacturing expansion in China, the nation’s top trading partner, bolstered the outlook for exporters. The benchmark entered a bull market on May 7 after Petroleo Brasileiro SA rallied as polls showed President Dilma Rousseff losing support, spurring speculation a change in government would reduce intervention in state-run companies.

“It’s a little too early to say that a rival to Dilma will win and change the management of state-controlled companies,” Alvaro Bandeira, a partner at Orama Asset Management, said in a phone interview from Rio de Janeiro. “Investors are more cautious about that now.”

Oi lost 7.2 percent to 1.81 reais, the worst performance on the Ibovespa, after two non-executive board members at parent company Portugal Telecom SGPS SA resigned without providing a reason.

Qualicorp declined 1.3 percent to 25.75 reais.

Vale SA, which gets about a third of its sales from China, rose 1.2 percent to 26.66 reais.

Trading volume of stocks in Sao Paulo was 4.52 billion reais today, according to data compiled by Bloomberg. That compared with a daily average of 6.6 billion reais this year, according to data from the exchange.

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