Ibovespa Futures Slump as Moody’s Cuts Petrobras Rating to Junk

Ibovespa futures declined as Moody’s Investors Service reduced the credit rating of state-controlled Petroleo Brasileiro SA to junk amid a corruption probe.

Contracts due in April slumped 1.2 percent to 52,000 at 9:25 a.m. in Sao Paulo. Moody’s kept a negative outlook on the producer known as Petrobras after cutting it to Ba2, two levels below investment grade, on Tuesday. The company’s ADRs declined 6.7 percent in early trading in New York.

“Even though Petrobras’s problems have been unfolding for three or four months, the size of the cut and the indication that further reductions could happen were surprising,” Alexandre Povoa, who helps oversee $100 million at Canepa Asset Management, said by phone from Rio de Janeiro. “That’s the most important Brazilian company, and the downgrade should affect the mood of international and local investors regarding the country’s assets.”

Petrobras accounts for about 8 percent of the benchmark stock index’s weighting.

Meatpacker JBS SA may move after Reuters reported the company will halt eight units because of a truckers’ strike. Phone carrier Telefonica Brasil SA may be active as fourth-quarter profit exceeded analysts’ estimates.

The Ibovespa 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 5.9 billion reais ($2.1 billion) Tuesday, according to the exchange. That compares with a daily average of 6.7 billion reais this year.

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