Brazilian shares broke a four-day run of gains on Tuesday, mirroring declines in global stocks after weak China data-fueled growth concerns, while currencies were tepid ahead of major central bank policy decisions.
The Bovespa dropped 0.4%, easing off one-month highs as a handful of retailers fell on the news that U.S. online retail giant Amazon.com Inc will launch its Prime subscription service in the country.
Magazine Luiza, Via Varejo and B2W fell between 4% to 6%, leading declines in the Bovespa. Major lenders including Banco Bradesco SA, Itau Unibanco Holding SA and Banco do Brasil SA dropped about 2% each after Brazil's government cut its annual inflation forecast, pointing to further monetary easing in Latin America's largest economy.
The government also slightly raised Brazil's annual economic growth forecast.
Most currencies made slight moves against the dollar, as investors awaited the European Central Bank's monetary policy decision on Thursday, when it is expected to cut interest rates and restart an asset purchase program. Investors, however, are anxious about how far policymakers are willing to go to stimulate their slowing economies.
Global markets have taken on a subdued tone as investors look ahead to Thursday's crucial ECB policy meeting,” Ned Rumpeltin from TD Securities wrote in a note.
The Brazilian Real pared early losses and traded sideways, with other currencies in the region moving in a similar range. Tuesday trading closed at 4.08 Reais to the US dollar.