Ibovespa Falls as Drop in Oil Dims Petrobras Investment Outlook

The Ibovespa fell for the sixth time in seven days as a decline in crude oil dimmed the outlook for Petroleo Brasileiro SA’s offshore investments.

Air carrier Gol Linhas Aereas Inteligentes SA slumped the most this year after Banco Santander Brasil SA cut its recommendation on the stock to hold. Lender Banco do Brasil SA climbed after Brazil’s central bank refrained from signaling bigger increases in borrowing costs, boosting the outlook for loan demand.

The Ibovespa dropped 0.1 percent to 48,880.40 at the close of trading in Sao Paulo. West Texas Intermediate for April delivery sank 2.4 percent to $47.03 a barrel on the New York Mercantile Exchange. Petrobras, as Petroleo Brasileiro is known, fell 3.3 percent to 8.50 reais. The producer has said its offshore output investments are viable with oil prices at $45 a barrel.

“The price of oil has a big influence on Petrobras because of its investment prospects,” Rafael Ohmachi, analyst at brokerage firm SLW Corretora, said in a phone interview from Sao Paulo. In addition, “there’s a lot of uncertainty regarding its future.”

Former executives of Petrobras are being investigated for allegedly taking bribes from construction companies to grant building contracts.

Gol dropped 6.9 percent to 8.70 reais.

Earlier Gains

The Ibovespa climbed as much as 1.5 percent earlier as banks rose. Itau Unibanco Holding SA added 0.4 percent to 34 reais reais after rallying as much as 1.6 percent. Banco do Brasil advanced 1.3 percent to 21.90 reais.

“Brazilian banks have great fundamentals and are poised to gain from a bigger demand for financing in an eventual scenario of lower interest-rate increases,” Raphael Figueredo, an analyst at brokerage firm Clear Corretora, said in a phone interview from Sao Paulo.

The minutes of the March 3-4 central bank meeting cited evidence that inflation will converge toward target in 2016. The central bank raised the benchmark lending rate last week by a half-percentage point for a third straight meeting, lifting it to 12.75 percent.

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 6.8 billion reais Thursday, according to data compiled by Bloomberg. That compares with an average estimate of 6.6 billion reais this year, according to the exchange.

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