Ibovespa Leads World Losses on Central Bank as Petrobras Tumbles

The Ibovespa led losses among major equity benchmarks as Brazil’s central bank signaled that it will keep raising interest rates to curb inflation, dimming the outlook for companies depending on domestic demand.

State-controlled oil producer Petroleo Brasileiro SA slumped a fourth day after saying there’s no set date for a gasoline price increase. Pulp and paper producer Fibria SA gained the most on the index as the Brazilian currency weakened.

The Ibovespa dropped 2 percent to 52,637.06 at the close of trading in Sao Paulo as 60 of its 70 stocks declined. The real lost 2.3 percent to 2.5669 per dollar at 5:23 p.m. local time. The central bank said said today that it will remain vigilant regarding inflation after policy makers lifted the target lending rate on Oct. 29 to 11.25 percent from 11 percent.

“With this outlook for interest rates, investors think that 2015 will be a very negative year for the economy,” Jason Vieira, an economist at consulting firm MoneYou, said by phone from Sao Paulo. “The doubts regarding President Dilma Rousseff’s economic team and policies are also leaving investors very anxious and concerned.”

Petrobras tumbled 2.4 percent to 14.06 reais. Fibria climbed 4 percent to 31.79 reais.

The benchmark stock index has lost 6.8 percent in dollar terms this week, the most among major global benchmarks, according to data compiled by Bloomberg.

The Ibovespa has fallen 15 percent from this year’s high in September as Rousseff’s re-election Oct. 26 ended speculation that a victory for an opposition candidate would help to boost growth and reduce intervention in state-owned companies.

Trading volume of equities in Sao Paulo was 6.85 billion reais today, according to data compiled by Bloomberg. That compares with a daily average of 7.3 billion reais this year, according to the exchange.

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