The Bovespa (IBOV) stock index posted a third consecutive weekly decline after slower-than-forecast growth in China’s industrial production and retail sales signaled a further slowdown in Brazil’s biggest trading partner.
Vale SA, the world’s largest iron-ore producer whose top export market is China, contributed the most to the gauge’s 0.4 percent decline today. Petroleo Brasileiro SA fell, following crude prices lower. BM&FBovespa SA, the operator of Latin America’s largest securities exchange, gained after reporting first-quarter profit that rose on higher trading volumes.
Brazil’s benchmark equity gauge dropped to 59,445.21 at the close of trading in Sao Paulo, extending this week’s fall to 2.3 percent. The real weakened 0.4 percent to 1.9616 per U.S. dollar at 5:27 p.m. local time.
“China’s economic data pushed commodities lower, which ends up dragging down stocks that are heavily weighted on the Bovespa index,” Marcello Paixao, a money manager at Sao Paulo-based hedge fund Principia Asset Management, said in a phone interview. “Falling interest rates may boost domestic demand. For commodities producers, uncertainties are higher, as they depend more heavily on the external outlook.”
Thirty-three stocks rose on the gauge today as 30 fell.
China’s industrial production expanded 9.3 percent in April from a year earlier, the least since April 2009. Retail sales rose 14.1 percent from a year earlier, trailing the 15.1 percent median estimate of analyst surveyed by Bloomberg.
Vale sank 3.1 percent to 38 reais. Petrobras, as Petroleo Brasileiro is known, fell 2 percent to 19.53 reais.
Cia. Siderurgica Nacional SA, Brazil’s third-biggest steelmaker, dropped 3.7 percent to 14.56 reais. The company said in a statement yesterday that first-quarter net income slumped 82 percent to 110.7 million reais ($56.5 million). That compares with the average estimate of 446.6 million reais among nine analysts surveyed by Bloomberg.
The Bovespa earlier rose as much as 1.1 percent as consumer stocks advanced after Brazil’s central bank president Alexandre Tombini said consumer price increases in Brazil will ease in the next three months, spurring speculation policy makers may further lower borrowing costs.
Homebuilder Cyrela Brazil Realty SA Empreendimentos e Participacoes added 2.5 percent to 14.94 reais, the steepest advance on the The MSCI Brazil/Consumer Discretionary Index, which rose 1.8 percent.
BM&FBovespa climbed 1.2 percent to 10.25 reais.
The Bovespa has gained 4.7 percent in 2012, buoyed by local interest-rate cuts, signs of expansion in the U.S. and optimism that Europe may be closer to resolving its sovereign-debt crisis. The measure has fallen 13 percent since this year’s high on March 13 on rekindled concern about Europe and on speculation the slowdown in China, Brazil’s biggest trading partner, may be deeper than expected.
The Bovespa trades at 9.9 times analysts’ earnings estimates, in line with the 10.2 ratio for MSCI Inc.’s measure of 21 developing nations’ equities, data compiled by Bloomberg show. Trading volume was 6.04 billion reais in stocks in Sao Paulo today, data compiled by Bloomberg show. That compares with a daily average of 7.2 billion reais this year through May 10, according to data from the exchange.
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