Azernews.Az

By Bloomberg

A drop in Brazil’s consumer confidence to an almost record low added to speculation Latin America’s largest economy is slowing further, dragging down Ibovespa futures.

The economic gauge retreated to 85.1 in May from 85.6 in the previous month, the Getulio Vargas Foundation, an education and research institution based in Rio de Janeiro, said on its website. It approached an all-time low reached in March.

With unemployment on the rise and above-target inflation eroding wages, consumer and investor confidence in Brazil has plunged. In a bid to shore up public finances and avert a credit rating downgrade, the government announced a budget freeze of $22.4 billion last week. Brazil’s economy is poised for the worst contraction since 1990, a central bank survey with analysts showed on Monday.

Ibovespa futures due in June dropped 0.5 percent to 54,675 at 9:30 a.m. in Sao Paulo. The contracts also retreated on speculation the U.S. is moving closer to raising interest rates, reducing the appeal of emerging-market assets. The real lost 1.1 percent in a fourth day of declines.

Education companies including Kroton Educacional SA may move after Brazil said it will require test results to apply for the student loan known as Fies. Banco Industrial e Comercial SA, known as BicBanco, may be active after Folha de S.Paulo reported China’s CCB is seeking to pay less for a stake in the lender.

Trading volume of equities in Sao Paulo was 3.6 billion reais on Monday, when markets including the U.S. were shut for a holiday. That compares to a daily average of 7 billion reais this year, according to the exchange.