Brazil’s real and the Ibovespa slid as China’s yuan devaluation fueled concern that demand from the nation’s top trading partner will falter. Stocks and the currency pared losses after Moody’s Investors Service signaled a cut to junk isn’t likely any time soon.
The real dropped 1.1 percent on speculation that trade inflows from the Asian nation will slump and as Goldman Sachs Group Inc. said it may weaken to 4 per dollar in the next 12 months. Vale SA, which gets a third of its revenue from China, extended this year’s plunge to 24 percent. Commodity companies in the MSCI Brazil fell 3.4 percent, the most among 10 industries.
Brazilian assets joined a global selloff that pushed a gauge of emerging-market equities into a bear market, following a 20 percent tumble from a September peak. China devalued the yuan as policy makers at Asia’s largest economy stepped up efforts to combat the deepest slowdown since 1990 and support local exporters.