Brazils stocks slumped on Friday, led by losses in heavyweights Petrobras and Vale, as poor industrial data at home and grim job figures abroad dented appetite for risker assets such as the local currency. The Bovespa index rallied at the open but by late afternoon turned down along with Wall Street, where a bearish brokerage view on Apple Inc inspired a sell-off in technology shares.
But trade was choppy and some US indexes closed higher. Sao Paulos main stock index, the Bovespa, fell 0.7 percent to 37,105 after data showed industrial output posted a record yearly plunge in January. Itau Securities, the brokerage arm for Latin Americas largest bank, slashed its forecast for economic growth in 2009 to 0.6 percent from 1.5 percent and inspired investors to price in a steeper rate cut next week.
A majority of 30 economists polled by Reuters expects a 100 basis-point cut in the benchmark Selic rate to 11.75 percent next week, but the April 2009 contract fell to 11.71 percent on Friday.
Interest rate futures at the BM&F commodities and futures exchange were sharply lower across the board.On the stock market, Petrobras and Vale led losses even as copper and energy prices rebounded.State-run oil company Petrobras shed 1.3 percent to 25.67 reais and mining giant Vale lost 2.3 percent to 26.57 reais. Steelmakers shared in the gloom. Gerdau lost 4.3 percent to 11.48 reais, fell 0.6 percent to 31.02 reais and Usiminas fell 0.7 percent to 24.30 reais.
Commodity assets suffered in recent months on expectations that demand for energy and metals would slump along with the world economy. But trade has been choppy in recent sessions on speculation that China, an avid energy consumer, may provide more stimulus to revive its economy. Financials bucked the trend, rising despite sharp losses in US banks. Banco Itau, Banco Bradesco and Banco do Brasil were up 1.4 percent, 2.3 percent and nearly 2 percent, respectively.
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