The Bovespa index fell, snapping a two-day advance, as lower oil prices pushed producer Petroleo Brasileiro SA (PETR4) down amid concern a bailout for Spain’s banks won’t be enough to stop Europe’s crisis from worsening.
Petrobras, as Petroleo Brasileiro is known, and OGX Petroleo (OGXP3) & Gas Participacoes SA contributed the most to the benchmark’s drop. Tam SA (TAMM4), Brazil’s biggest airline by market value, fell to a two-week low as a deadline loomed to tender shares for a swap that is part of its combination with Chile’s Lan Airlines SA. (LFL) (LFL)
The Bovespa slid 0.8 percent to 54,001.44 at the close in Sao Paulo. The gauge earlier rose as much as 1.8 percent after Spain asked euro-region governments for as much as 100 billion euros ($125 billion) to help shore up its banking system. Forty stocks fell on the benchmark today while 28 advanced. The real weakened 1.8 percent to 2.0604 per U.S. dollar at 5:42 p.m. local time.
“It’s good news if Spain manages to avoid a banking crisis, but the fact that the country’s banks need that much money to keep their heads above water shows how bad things are in the region,” Felipe Casotti, who helps manage 800 million reais ($390 million) at Maxima Asset Management, said by phone from Rio de Janeiro. “Besides, avoiding a collapse in the financial system is just one of the many challenges Europe faces.”
Petrobras fell 2.6 percent to 18.39 reais. OGX tumbled 7.4 percent to 9.39 reais. Crude for June delivery dropped 1.7 percent in New York, reversing an earlier gain of 3 percent.
Some companies that sell in the local market declined as economists covering Brazil lowered their growth forecasts for a fifth week. Retailer Cia. Hering (HGTX3) fell 1.1 percent to 41.74 reais.
Cia. de Bebidas (ABV) das Americas, Latin America’s largest brewer, dropped 0.9 percent to 73.82 reais. Clothing retailer Cia. Hering slid 1.1 percent to 41.74 reais.
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