Brazil currency, stocks fall to lowest in a month

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SAO PAULO, Nov 21 (Reuters) - Brazil's main stock index fell for a third session on Wednesday and the currency fell to the lowest level in a month as concerns over the U.S. economy pushed equities around the world lower and sapped investors' appetite for risky emerging market securities.

The Bovespa index .BVSP of the Sao Paulo Stock Exchange fell 2.8 percent to 60,581 points, its lowest level since closing at 60,406 on Oct. 4. The decline extended a 3.5 percent dive on Monday before a local holiday closed markets on Tuesday.

Brazil's real (BRBY) weakened around 0.6 percent to 1.778 per U.S. dollar, its lowest level since Oct. 25.

The U.S. Federal Reserve on Tuesday projected that the U.S. economy would expand between 1.8 percent and 2.5 percent in 2008, sharply lower than a previous forecast in June. Concerns over a slowdown in the United States fueled a slump in equity markets around the world.

The Dow Jones industrial average was down around 1.3 percent and the Nasdaq Composite Index was around 1 percent lower in late afternoon trade.

"The market is quite fearful," said Renato Schoemberger, a trader at the Alpes brokerage.

Yield spreads of Brazil's overseas bonds over comparable U.S. Treasuries as measured by JPMorgan's EMBI+ index widened, reflecting an increase in investors' risk aversion toward Brazilian assets. The index 11EMJ showed the country's bond spreads widened by 11 points to 233.

Interest-rate futures <0#DIJ:> on the BM&F commodities and futures exchange in Sao Paulo were mixed, with rates on long-term contracts rising and short-term contracts edging lower.

Iron ore miner CVRD (VALE5.SA) was the biggest contributor to the drop in the Bovespa index, falling more than 3 percent to 48.60 reais as fears that a U.S. slowdown would trim demand for metals and push down prices of copper, nickel and zinc.

Concerns over the slowdown also pushed down shares of steelmakers. Usiminas (USIM5.SA), Brazil's biggest producer of steel for the auto industry, was down 2.3 percent at 125 reais, while shares of Gerdau (GGBR4.SA) fell 3.8 percent to 48.60 reais and Cia. Siderurgica Nacional (CSNA3.SA) lost nearly 2 percent to close at 126.63 reais.

Banco do Brasil (BBAS3.SA), Latin America's largest bank by assets, tumbled 7.3 percent to 24.92 reais after two of its biggest shareholders disclosed details of a planned sale of shares in the bank.

Previ, the pension fund for Banco do Brasil employees, and BNDESPar, a unit of national development bank BNDES, said on Wednesday they may sell as many as 117.7 million shares of Banco do Brasil in a secondary offering.

State-owned oil company Petrobras (PETR4.SA), the heaviest weighted stock in the index, fell 1.9 percent to 75.85 reais as crude prices retreated after earlier closing in on the key $100-a-barrel mark. (Reporting by Elzio Barreto and Silvio Cascione, Editing by Jonathan Oatis)