Shares of Brazilian companies trading on U.S. exchanges dropped Thursday after the South American country's central bank forecast a year-end inflation rate of about 6 percent, higher than originally predicted.
The Bank of New York Brazil ADR Index lost 16.83 points, or 2.9 percent, to 560.30. ADR stands for American Depositary Receipt, which is a security designed to allow U.S. investors to trade shares of companies based overseas.
The central bank had originally estimated a year-end inflation rate of about 4.5 percent, but raised it Wednesday due to rising food and fuel prices.
That was unwelcome news for many investors, as higher prices tend to limit consumers' overall spending power.
Meanwhile, U.S. markets were down sharply Thursday on concerns about the financial and automotive sectors, and rallying fuel prices.
Shares of airline ADRs posted the biggest drops, with TAM SA slipping $1.60, or 7.9 percent, to $18.79, and GOL Linhas Areas Inteligentes SA dropping 86 cents, or 6.8 percent, to $11.71.
Shares of meat processor Sadia SA slipped $1.58, or 7.1 percent, to $20.73, while shares of Uniao de Bancos Brasileiros SA dropped $5.93, or 4.5 percent, to $127.18.
The Bank of New York Emerging Markets ADR Index _ which includes shares of companies based in China, Mexico, Brazil and more _ lost 10.72 points, or 3 percent, to 345.07. The Bank of New York Composite ADR Index decreased 3.88 points, or 2.3 percent, to 166.71 as U.S. markets tumbled in afternoon trading.
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