Brazil's stock market fell to its lowest level in almost seven months on Friday as a decline in commodities dragged shares of state controlled oil giant Petrobras, mining company Vale and local steelmakers. The Bovespa index of the Sao Paulo stock exchange lost 1.62 percent to 54,244.03 points, its first decline in three sessions.
The index closed at its weakest level since January 21, when it ended at 53,709. Steelmakers Gerdau, CSN and Usiminas also fell on speculation weaker metals and commodities demand may also signal the companies have less room to raise prices.
At the stock exchange, Petrobras slumped 2.3 percent to 32.67 reais as crude prices fell below $114 a barrel. Crude earlier hit its lowest level in more than three months on concerns that oil demand will slow. Vale, the second-heaviest weighted stock in the Bovespa, fell 2.22 percent to 35.70 reais as copper prices sank as much as 2.7 percent, while nickel and zinc also declined on demand concerns.
The lower metals prices and demand worries also weighed on shares of local steelmakers, with Usiminas tumbling 3.75 percent to 53.90 reais, Gerdau dropping 2.78 percent to 28.36 reais and CSN easing 3.76 percent to 52.15 reais.
TAM Linhas Aereas, the country's largest airline, gained 2.38 percent to 34.35 reais as the slump in crude prices eased concerns that high fuel costs would eat into profits. Cemig, Brazil's largest combined utility, rose 1.16 percent to 35.66 reais. UBS Pactual reiterated a buy rating on the stock, saying in a report on Friday Cemig's second-quarter results were strong with better than expected profits and earnings before interest, taxes, depreciation and amortization.
Banco do Brasil, Latin America's largest bank by assets, rose 2.25 percent to 22.29 reais. Late on Thursday the bank reported a 54 percent surge in second-quarter profit to 1.64 billion reais because of strong growth in its credit portfolio.
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