Ibovespa Trims Monthly Advance as Recent Rally Deemed Excessive

The Ibovespa fell on speculation the biggest monthly rally since 2012 was excessive amid a slowdown in Latin America’s largest economy.

For-profit college operator Kroton Educacional SA contributed the most to the gauge’s decline after newspaper Valor Economico reported, without saying how it got the information, that Brazil is limiting the number of students who can apply for loans to one-third of the total in 2014. Brewery Ambev SA rose as Brazil’s budget surplus beat estimates.

The Ibovespa declined 0.3 percent to 51,538.09 at the end of trading in Sao Paulo, trimming its monthly advance to 10 percent.

“Investors are pretty optimistic with the fiscal adjustment measures, but that’s a long-term view,” Rafael Ohmachi, analyst at brokerage firm SLW Corretora, said in phone interview from Sao Paulo. “The Brazilian economy right now is still pretty weak.”

Kroton declined 9.7 percent to 10.39 reais. Homebuilder Gafisa slumped 7.1 percent to 2.10 reais.

The Ibovespa rose as much as 1.4 percent earlier today as Brazil posted its first monthly nominal budget surplus in two years as the government endeavors to tighten fiscal accounts and shore up investor confidence.

Ambev added 0.2 percent to 18.34 reais. State-controlled oil producer Petroleo Brasileiro SA, known as Petrobras, climbed 3.2 percent to 9.57 reais.

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