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The Bovespa index fell, extending three weeks of losses, after faster inflation in China and weaker job creation in the U.S. spurred concern that economic growth will slow for Brazil’s two biggest trading partners.
Oil companies OGX Petroleo & Gas Participacoes SA (OGXP3) and Petroleo Brasileiro SA (PETR4) contributed the most to the gauge’s drop, following commodities prices lower. Sugar-cane processor Cosan SA Industria e Comercio snapped a five days of gains as Citigroup Inc. lowered its recommendation to the equivalent of hold.
The Bovespa tumbled 1.2 percent to 62,923.21 at the close in Sao Paulo. Fifty-six stocks dropped on the gauge and 12 gained. The real strengthened 0.2 percent to 1.8186 per U.S. dollar. The Standard & Poor’s GSCI index of 24 raw materials declined 0.6 percent.
“We’re seeing higher inflation in China, which means less room for stimulus measures, and weaker data in the U.S., where some investors were betting on a stronger recovery,” Felipe Casotti, who helps manage 1.2 billion reais ($657 million) at Maxima Asset Management, said by phone from Rio de Janeiro. “Brazil, which is a commodities exporter, may suffer from a deeper slowdown in the global economy.”
Consumer prices in China rose 3.6 percent in March from a year earlier, the National Bureau of Statistics said today, which exceeded the median 3.4 percent estimate among 33 economists surveyed by Bloomberg and signaled that policy makers may hold back on stimulus to boost growth. In the U.S., employers added 120,000 jobs in March, the fewest in five months and less than the median forecast of 205,000, a Labor Department report on April 6 showed.
Oil for May delivery fell 0.8 percent to settle at $102.46 on the New York Mercantile Exchange.
OGX, the oil company controlled by billionaire Eike Batista, declined 3.1 percent to 14.19 reais. Petrobras lost 1.9 percent to 21.59 reais.
Cosan slid 1.6 percent to 33.92 reais.
Lupatech SA (LUPA3), Brazil’s biggest provider of oil equipment and services, jumped 11 percent to 5.07 reais. The company signed an agreement with investors, including the Brazilian development bank and the Petros pension fund, that formalizes a Dec. 29 plan to sell 350 million reais to 700 million reais of new shares, according to a regulatory filing yesterday. Lupatech plans to call an extraordinary meeting by April 11 to approve the stock sale.
Brazil’s benchmark equity measure has gained 11 percent this year, buoyed by local interest-rate cuts, signs of growth in the U.S. and speculation Europe may be closer to resolving its debt crisis. The gauge trades at 10.5 times analysts’ earnings estimates, which compares with a 10.7 ratio for MSCI Inc.’s measure of 21 developing nations’ equities, weekly data compiled by Bloomberg show.
Traders moved 6.09 billion reais in stocks in Sao Paulo on April 5, data compiled by Bloomberg show. That compares with a daily average of 7.14 billion reais this year through April 4, according to data from the exchange.
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