Ibovespa Falls With Vale as Commodity Drop Damps Export Outlook

The Ibovespa retreated the most in a week as a drop in commodities dimmed the outlook for Brazil’s raw-material exporters.

Vale SA, the world’s largest iron-ore producer, snapped a two-day rally. Planemaker Embraer SA, which gets more than 90 percent of its revenue from exports, climbed to a 2015 high as the Brazilian currency weakened.

The Ibovespa lost 1.8 percent to 48,510.28 at the close of trading in Sao Paulo as 51 of its 68 stocks fell after the benchmark equity index earlier rose 0.8 percent. The Standard & Poor’s GSCI index of 24 raw materials declined 1.9 percent. Commodity producers account for about one-quarter of the Ibovespa’s weighting.

“Prices of raw materials have been falling a lot, so the producers in all emerging nations are suffering,” Luiz Roberto Monteiro, a trader at brokerage firm Renascenca DTVM, said by phone from Sao Paulo. “Brazil’s exchange is very dependent on those companies, so I don’t see an improvement soon.”

Vale dropped 4.8 percent to 17.72 reais, contributing the most to the 5.4 percent slump in the MSCI Brazil/Materials Index, the worst performer among 10 industry groups.

Embraer rose 2 percent to 25 reais, its highest since Dec. 23. The real lost 2.3 percent to 2.8347 per dollar as of 5:24 p.m. local time, its weakest since November 2004.

State-controlled Petroleo Brasileiro SA erased gains as crude slumped, dimming the outlook for its offshore investments. The shares fell 3.9 percent to 8.92 reais after earlier climbing 5.6 percent.

Petrobras Results

Petrobras rose earlier on speculation the oil company is closer to releasing delayed third-quarter audited results. The company met a deadline to report unaudited earnings on Jan. 28 to avoid breaching covenants on some of its bonds.

The benchmark stock index entered a bear market Dec. 12 after falling 22 percent from last year’s high in September. Trading volume of equities in Sao Paulo was 6.4 billion reais Tuesday, according to data compiled by Bloomberg. That compares with a daily average of 6.5 billion reais this year, according to the exchange.

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