Ibovespa Futures Drop as Central Bank Signals Further Tightening

Ibovespa futures retreated after Brazil’s central bank signaled in minutes of its last meeting that it will further raise interest rates, dimming the outlook for companies that depend on domestic demand.

Miner Vale SA may be active as iron-ore prices slumped to the lowest level in five years. Power utility Eletropaulo Metropolitana SA may move after reporting that sales exceeded analysts’ estimates in the third quarter.

Ibovespa futures contracts expiring in December dropped 0.9 percent to 53,685 at 9:31 a.m. in Sao Paulo as the central bank said in minutes published today that it will remain especially vigilant regarding inflation. Policy makers lifted the benchmark lending rate on Oct. 29 to 11.25 percent from 11 percent.

The benchmark stock index has fallen 13 percent from this year’s high in September as President Dilma 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 5.9 billion reais yesterday, according to the exchange. That compares with a daily average of 7.3 billion reais this year.

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