Bloomberg News

Ibovespa Futures Decline as Commodities Tumble on Fed Stimulus

June 20, 2013

Ibovespa futures sank, a sign Brazil’s benchmark equity measure may extend the rout that sent it to a four-year low yesterday, as commodities fell after the Federal Reserve said it may pare monetary stimulus this year.

CCX Carvao da Colombia SA, billionaire Eike Batista’s coal unit, may be active after he canceled a plan to delist the company. Iron-ore producer Vale SA may move after data showed manufacturing is shrinking at a faster pace this month in China, its biggest export market.

Ibovespa futures contracts expiring in August lost 1.6 percent to 47,005 at 9:11 a.m. in Sao Paulo. The real weakened 0.5 percent to 2.2350 per dollar, depreciating for a fifth day.

“The Brazilian market should keep tracking the worsening in the external outlook, and stocks will probably fall again” today, Banco Bradesco SA’s economic team, led by Octavio de Barros, said in a note to clients.

Bonds, stocks and commodities fell around the world after Fed Chairman Ben S. Bernanke said yesterday the central bank may start reducing bond purchases this year and end the program in 2014 should risks to the U.S. economy abate.

The Ibovespa yesterday plunged 3.2 percent to its lowest since April 2009. The gauge slumped into a bear market last week after falling more than 20 percent from this year’s peak on Jan. 3, and has since extended those losses to 24 percent.

Brazil’s benchmark equity gauge trades at 11.6 times analysts’ earnings estimates for the next four quarters, compared with a multiple of 9.8 for the MSCI Emerging Markets Index of 21 developing nations’ equities.

Trading volume for stocks in Sao Paulo was 8.69 billion reais ($3.91 billion) yesterday, compared with a daily average of 7.86 billion reais this year through June 18, according to data compiled by the exchange.

To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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