The Bovespa Index Declines to 10-Week Low

The benchmark gauge of Brazil, the Bovespa Index has experienced a decline of 0.5% today and has reached to a figure that’s the lowest in last 10 weeks. The 2014 forecasts for Brazil have been reduced by numerous economists and many are concerned that the slower recovery process of the country is going to hurt the corporate earnings big time.

The Bovespa Index is currently at 57611.08 and this marks the lowest intraday value for the gauge since 6th December. Out of the listed 69 companies, 46 stocks experienced a tumble, whereas, the rest 23 showed increase. The major currency of Brazil, Real experienced a surge of 0.3% and it jumped up to 1.9622 per USD.

According to the economist of Souza Barros Corretora, Clodoir Vieira, if the economy takes more time than the expectations for recovering, the corporate earnings probably will go to a further weaker zone. This will go to result into sort of adjustment in the share prices as well.

Today’s decline was led by the various companies which depend on the domestic demand. The parent company of B2W, Lojas Americanas SA experienced a huge fall in the gauge. On the other hand, as there are signs of slower growth in China, metals went down to a lower level causing steelmaker Usinas Siderurgicas de Minas Gerais SA to head towards a 15-week low value.

According to current forecasts, the Gross Domestic Product of Brazil is expected to expand by 3.65% in 2014, which is lower than the initial forecasts made. For 2013, the growth outlook is of 3.08%, lower than 3.09% of just a week earlier.

B2W experienced a slump of 5% and is at 13.38 Reais per share now. On the other hand, Lojas Americanas saw a decline of 2.4% and each share of the same is currently at 17.38 Reais. The biggest retailer of Brazil, CIA. Brasileira de Distribuicao Grupo Pao de Acucar, however, jumped up by 0.6% as Banco Espirito Santo de Investimento SA rated it as buy.

Usiminas, on the other hand, saw its shares decline by 3.2% and each share is priced at 9.82 Reais now. Multiplan Empreendimentos Imobiliarios SA, the renowned Real Estate Developer of Brazil, on the other hand saw its share prices increasing by 1.7%. The company’s adjusted net income was of 128.5 million Reais in the last quarter of 2012.