By Paul Kiernan
RIO DE JANEIRO--Brazilian stocks closed lower Monday on concerns
about the outlook for commodity prices and local economic policy,
while the currency recovered some of the past week's heavy
losses.
Brazil's benchmark Ibovespa stock index fell 0.9% to 52275.38
points. Volume was light, with 4.84 billion Brazilian reais
changing hands.
The real closed moderately stronger, exiting active trading at
2.5542 Brazilian reais to the dollar, according to Tullett Prebon
via FactSet, compared with 2.5676 reais at Friday's close.
Brazil's stocks and currency have shed about 5% of their value
over the past month, most of it following the Oct. 26 reelection of
left-leaning President Dilma Rousseff.
Analysts say local financial markets are likely to continue
seeing high volatility until Ms. Rousseff names a successor for
outgoing Finance Minister Guido Mantega. Appointments to the
government's economic team will provide some key insight into the
direction of policy during Ms. Rousseff's second term after her
first four years in office were beset by flagging growth and
stubborn inflation.
Igor Graminhani, a technical analyst at Sao Paulo's Alpes
brokerage, said the Ibovespa has been in a negative trend since
early September and has yet to show signs of changing.
"I don't see an opportunity for investors to get in right now,"
he said.
Shares of mining giant Vale tumbled 2.5% to 20.18 reais, their
lowest close since March 2009, as prices for iron ore remained near
five-year lows.
Sao Paulo-based SulAmerica Investimentos said in a note Monday
that the world iron-ore market is likely to remain over-supplied
for the next four years as new projects from mining majors like
Vale come on-line.
"Commodities prices should continue falling or should stabilize
at low levels going forward, negatively affecting terms of trade
for commodity exporting countries like Brazil," the firm said.
State-owned oil firm Petrobras fell 2% to 13.98 reais, bank Itau
slipped 0.3% to 36.05 reais, and steel maker Gerdau fell 2.2% to
11.34 reais.
Write to Paul Kiernan at paul.kiernan@wsj.com