Brazil's stocks fell on Friday as investor sentiment soured after a report showing a slowdown in US manufacturing prompted a slump in equity markets. The Sao Paulo Stock Exchange's benchmark Bovespa index fell 1.44 percent to a preliminary close of 41,327 points.
Manufacturing in the United States contracted in November for the first time in more than 3-1/2 years, a report on Friday showed, a day after another report showed a contraction in business activity in the US Midwest, confirming an economic slowdown that could cut investment flows to emerging markets. The Dow Jones industrial average fell 0.7 percent, while the Nasdaq Composite Index lost 1.2 percent, dragging down Brazilian stocks.
Shares of Petrobras, the heaviest-weighted stock in the Bovespa, fell 1.2 percent to 45.3 reais. Iron ore miner CVRD, the second heaviest stock in the index, fell 1.6 percent to 49.75 reais.
Shares of TAM, Brazil's biggest airline, fell 2.5 percent to close at 59.49 reais, while the country's No 2 carrier Gol fell 2.3 percent to 60.29 reais after J.P. Morgan Securities cut its recommendation for TAM and Gol to "underweight" from "neutral," saying the companies probably won't meet consensus earnings expectations.