The Bovespa index swung between gains and losses as an unexpected slowdown in Chinese manufacturing pushed steelmakers lower, outweighing gains by Brazilian homebuilders.
Gerdau SA, Latin America’s largest steelmaker, fell for the first time in five days. Rossi Residencial SA led gains by real estate companies on speculation the central bank may lower borrowing costs further after a report showed Brazil’s industrial output increased less than forecast in June.
Brazil’s benchmark equity gauge advanced 0.2 percent to 56,198.86 at 12:41 p.m. in Sao Paulo, after fluctuating between a loss of 1.2 percent and a gain of 0.5 percent. The real appreciated 0.8 percent to 2.0400 per U.S. dollar. The Bloomberg Base Metals 3-Month Price Commodity Index lost 1.4 percent.
“China’s numbers were slightly weak, which is especially bad for steelmakers and mining companies as it affects metals prices,” Pedro Galdi, the chief strategist at Sao Paulo-based brokerage SLW Corretora, said in a phone interview.
China’s purchasing manager’s index dropped to 50.1 in July, the country’s National Bureau of Statistics said in a statement, compared with a median forecast for a gain to 50.5 among 24 economists surveyed by Bloomberg News.
Gerdau slid 1.4 percent to 18.36 reais.
Brazilian swap rates dropped after the national statistics agency said industrial production rose 0.2 percent in June. Economists had expected output to increase 0.8 percent from the previous month, according to the median of 41 forecasts compiled by Bloomberg. Output fell 5.5 percent from a year ago.
“Figures seem to support the central bank’s strategy to lower interest rates to shore up growth,” Luis Gustavo Pereira, an analyst at Futura Corretora, said by phone from Sao Paulo.
Rossi rose 5 percent to 4.88 reais. Competitor Brookfield Incorporacoes SA advanced 3.9 percent to 3.19 reais.
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