BR Malls Participacoes led declines among real estate stocks, while utility Centrais Eletricas Brasileiras SA fell the most on the benchmark gauge. Homebuilder Brookfield Incorporacoes SA (BISA3) rallied after saying its corporate parent will offer to buy all outstanding shares for as much as 1.60 reais each to take it private.

The Ibovespa fell 1.3 percent to 47,576.33 at the close of trading in Sao Paulo, with 63 stockslower and eight higher. The real was little changed at 2.3877 per U.S. dollar at 5:25 p.m. local time. Brazil’s gross domestic product will expand 1.79 percent this year, down from a projection of 1.90 percent a week earlier, according to the median forecast in a central bank survey of about 100 economists published today. The estimate for inflation rose to 5.93 percent from 5.89 percent.

“Growth is weak and inflation is high,” Luciano Rostagno, the chief strategist at Banco Mizuho do Brasil in Sao Paulo, said in a phone interview. “Weak economic fundamentals will probably continue to weigh on equities for a while.”

Reports this month showed Brazil’s retail sales and industrial production contracted in December, adding to concern that growth is faltering. Central bank economic policy director Carlos Hamilton said last week that consumer prices will remain elevated because of factors including a weaker real.

Natura, Brookfield

Natura declined 3.6 percent to 36.20 reais, the lowest since December 2011. BR Malls tumbled 4.7 percent to 16.15 reais, the most since July. Voting shares of Eletrobras, as Centrais Eletricas is known, lost 5.6 percent to 4.76 reais.

Brookfield jumped 19 percent to 1.47 reais.

Trading volume on the Ibovespa was 41 percent below the average of the past 30 days, data compiled by Bloomberg show. U.S. markets are closed for a holiday.

Brazil’s benchmark equity index has tumbled 16 percent from a bull-market high on Oct. 22 as inflation exceeded policy makers’ target and concern mounted that higher government spendingwill lead to a reduction in the country’s credit rating.

To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net

To contact the editor responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net

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