Bloomberg News

Bovespa Index Falls as Europe Concern Sparks Commodity Declines

September 28, 2011

Sept. 28 (Bloomberg) -- The Bovespa stock index fell for the first session in three, joining a global rout in equities, as concern about Europe’s debt crisis pushed down commodity prices and damped the outlook for Brazilian producers.

Oil companies Petroleo Brasileiro SA and OGX Petroleo & Gas Participacoes SA followed crude prices lower. Fibria Celulose SA, the world’s largest pulp producer, fell for the sixth day in seven. Tam SA led declines amid concerns about regulatory conditions on its sale to Chile’s Lan Airlines SA.

The Bovespa fell 1.2 percent to 53,270.36 at the 4:15 p.m. New York time close. Fifty-nine stocks fell on the index while seven rose. The real weakened 1.6 percent to 1.8355 per dollar.

“The market is still waiting to see if something will be defined on Greece,” said Joao Pedro Brugger, who helps oversee 70 million reais ($38.3 million) at Leme Investimentos in Florianopolis, Brazil.

Brazil’s benchmark equity gauge erased an earlier gain of as much as 1.6 percent, tracking the Standard & Poor’s 500 Index lower. U.S. stocks halted a three-day rally as investors watched for signs of progress in Europe’s efforts to stem the government debt crisis. The Standard & Poor’s GSCI index of 24 raw materials slumped 2.7 percent.

Petrobras, Brazil’s state-controlled oil producer, fell 1 percent to 19.35 reais. Billionaire Eike Batista’s OGX slipped 1.2 percent to 11.96 reais. Fibria lost 4.4 percent to 14.56 reais.

Tam tumbled 5.2 percent to 31.60 reais after Lan requested a review of the data that Chilean antitrust regulators used when they set conditions for its takeover of the Brazilian carrier.

Trading Volume

The Bovespa entered a bear market in July after plunging 20 percent from its bull-market peak last year on concern quickening inflation and a slowing global economy will hurt Brazil’s growth. The measure has since extended that drop to 26 percent and trades at 9.2 times analysts’ earnings estimates, according to weekly data compiled by Bloomberg. That matches the ratio for MSCI Inc.’s gauge of 21 developing nations’ equities.

Traders moved 5.5 billion reais in stocks in Sao Paulo yesterday, data compiled by Bloomberg show. That compares to a daily average this year of 6.53 billion reais through Sept. 14, according to data from the exchange.

--Editors: Richard Richtmyer, Brendan Walsh

To contact the reporter on this story: Alexander Cuadros in Sao Paulo at

To contact the editor responsible for this story: David Papadopoulos at

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