BRASÍLIA: The Ibovespa fell, leaving it lower for the week, as a decline in commodity prices dimmed the outlook for Brazil’s exports. Steelmaker Cia. Siderurgica Nacional SA, known as CSN, was the worst performer on the MSCI Brazil/Materials Index, while Gerdau SA also retreated. Localiza Rent a Car SA fell the most in two months, leading declines among companies that depend on domestic demand after inflation data discouraged bets that the central bank will reduce borrowing costs anytime soon.
Brazil joined a global decline in equities Friday after the European Central Bank on Thursday downplayed the need for more stimulus measures, which sent Bloomberg’s commodity index lower for the first time in five days. The decline in raw-materials has an outsize impact in Brazil, where commodities make up 60 percent of exports and publicly-traded producers account for 23 percent of the benchmark equity index’s weighting.
“The market believed that authorities everywhere would do almost anything to support activity, and that doesn’t seem so true now,” Hersz Ferman, an analyst at the brokerage Elite Corretora, said from Rio de Janeiro. “Assets are now adjusting to a tougher reality.” The Ibovespa dropped 1.9 percent to 59,079.33 at 10:49 a.m. in Sao Paulo as all but two of its 58 stocks fell. CSN lost 2 percent and Gerdau fell 1.3 percent. Localiza declined 3.6 percent.
