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Brazil's Real Leads World Declines as Bonds Tumble After S&P Cut

  • Shares of Petrobras, Itau among hardest hit in Ibovespa
  • Currency retreats to lowest level since October 2002
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Brazil's Credit Rating Downgraded to Junk

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Brazilian markets tumbled after Latin America’s largest economy returned to junk status as it struggles to overcome a crippling recession.

The real fell 1.8 percent to 3.8496 per dollar, the most among major currencies, after the nation lost its investment-grade rating at Standard & Poor’s. The Ibovespa stock index dropped 0.3 percent to 46,503.99, trimming an earlier slump of 2.3 percent. Oil producer Petroleo Brasileiro SA, which was also downgraded to junk, extended this year’s plunge. Yields on Brazil’s $4.3 billion of bonds due in 2025 rose to the highest since they were issued in 2013. The iShares MSCI Brazil Capped ETF exchange-traded fund touched a decade low.