SAO PAULO: Brazil’s benchmark Bovespa index fell almost 1.5 percent in morning trade on Wednesday, its biggest intraday drop since-mid April, pressured by steep losses among heavily weighted stocks during an otherwise quiet day across Latin American markets.
Traders consulted by Reuters in Sao Paulo and Rio de Janeiro said they were keeping an eye on Brazil-listed companies that have American Depository Shares.
Tuesday was a holiday in Brazil, but ADSs kept trading in New York, where Brazilian companies posted significant losses for disparate reasons. Among the biggest decliners, rental car company Localiza Rent a Car SA tumbled 3.5 percent and state-run oil firm Petroleo Brasileiro SA slid 1.4 percent.
Elsewhere, shares in Ita? Unibanco Holding SA and Itau Investimentos Itau SA both dropped more than 3 percent, accounting for around a third of the Bovespa’s drop. Ita? Unibanco’s reported first-quarter results Tuesday night, saying it relied more on lower loan-loss expenses than on loan growth to slightly beat analysts’ average earnings estimate.
Heavily weighted stock exchange operator B3 SA and Raia Drogasil SA, Brazil’s largest listed retailer of over-the-counter drugs, also dropped dramatically after client notes from BTG Pactual and JP Morgan.
Raia Drogasil SA shares slumped 5 percent after the note from JP Morgan analysts said the company was “likely to be pressured by stepped-up competition with improved execution.”
As of the early afternoon, the Bovespa had fallen 1.46 percent, much more than other equities markets in the region.
Mexico’s IPC index had dropped 0.5 percent while Chile’s IPSA fell a modest 0.17 percent.
Source: Brecorder
