Ibovespa Declines to Four-Week Low as Vale Slumps With Iron Ore

  • State-owned Petrobras also follows drop in crude prices
  • Brewer Ambev rose after 2017 growth forecast increased

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The Ibovespa fell to a four-week low as Vale SA followed a slump in iron ore prices after a report out of China showed stockpiles of the raw material rose to the highest level in more than a year.

Vale contributed the most to the benchmark equity gauge’s decline, and six of the 10 worst performers on the index on Monday were related to the steel-making industry. State-controlled oil producer Petroleo Brasileiro SA dropped with crude prices.

Monday’s stock tumble pares a year-to-date rally driven by speculation that a new government can pull Latin America’s biggest economy out of its worst recession in a century. While efforts to impeach President Dilma Rousseff have helped revive investor confidence recently, concern that China’s economy is faltering added to an aversion to exporters on Monday. China is Brazil’s biggest trade partner.

"It’s all about Vale and other raw-materials today," Raphael Figueredo, an analyst at the brokerage Clear Corretora, said from Sao Paulo. "The mood for emerging markets is more negative now."

The Ibovespa fell 1.8 percent to 50,810.98 at 10:55 a.m. in Sao Paulo as 44 of its 59 stocks dropped. Vale declined 6.4 percent and Petrobras, as Petroleo Brasileiro is known, lost 3.9 percent.

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