The Brazilian index fell amid speculation that the rally, which sent the valuation to five-year highs, was overdone, as analysts cut their earnings forecasts for Brazilian companies more than in any major market in the Americas, according to Bloomberg.
Twelve out of the 14 stocks in the MSCI Brazil/Financials Index declined as Itau Unibanco (ITUB), Latin America's largest bank by market value, continued its two-day drop. The Ibovespa fell 1.4% to 57,251.64 at 2:20 p.m. in Sao Paulo.
Furthermore, EPS estimates for companies on Brazil's equity benchmark have been cut by 6.4% in the last four weeks, according to data compiled by Bloomberg.
More than 53.3 million shares had changed hands as of 2:58 p.m., compared to the daily average volume of 31,228,800.
Separately, TheStreet Ratings team rates VALE SA as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate VALE SA (VALE) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows: