Brazil Stocks Fall, led by Raw Material Producers; Ipsa Slips

By Alexander Ragir

Oct. 27 (Bloomberg) -- Brazil's Bovespa stock index fell to its lowest level in almost three years as commodity prices headed for the worst month in at least 38 years, hurting the earnings outlook for the nation's biggest raw-material producers.

Usinas Siderurgicas de Minas Gerais SA, Brazil's second- biggest steelmaker, dropped for a fifth day as metal prices tumbled on concern the global economic slowdown is deepening. Petroleo Brasileiro SA, the state-controlled oil company, extended its five-day slump to 21 percent as crude futures fell to their lowest level since May 2007.

The Bovespa index dropped 1.9 percent to 30,893.01 at 9:22 a.m. New York time, the lowest level since November 2005. It plunged 14 percent last week. Chile's Ipsa fell 0.3 percent.

Petrobras dropped 2.1 percent to 19.97 reais. Crude oil for December delivery slid as much as 4.4 percent to $61.30 a barrel in New York.

Usiminas, as the steelmaker is known, dropped 5 percent to 22.71 reais. Nickel, aluminum, lead and zinc all fell in London. The S&P GSCI index of 24 raw materials lost 2.4 percent, extending its retreat this month to 33 percent, the most since at least 1970.

Cia. Vale do Rio Doce, the world's biggest iron ore miner, declined 1.6 percent to 21.70 reais. Copper demand in China, the world's biggest consumer, may grow at 5 percent this year, half the previous forecast, as the deepening global financial crisis curbs exports, said Duan Shaofu, copper division chief at the China Nonferrous Metal Industry Association.

To contact the reporter on this story: Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net.