SAO PAULO--Brazilian shares declined Monday, dragged lower for a second day amid uncertainty regarding Greece's debt negotiations, and the real weakened against the dollar.

The Ibovespa stocks index fell 0.4% to 53137 points. The real exited active trading at 3.1266 to the dollar, according to Tullett Prebon via FactSet, after closing at 3.1179 in Friday.

World stock markets declined Monday after the breakdown over the weekend of talks between Greece and its creditors, with European officials calling the latest Greek proposals "vague and repetitive"

A default by Greece could lead to its exit from the European common currency.

Shares of Sao Paulo state water utility Companhia de Saneamento Basico do Estado do Sao Paulo, or Sabesp, fell the most in the Ibovespa on Monday after the state's industrial federation said it will ask a court to block a planned water rate increase. Sabesp shares slumped 4.8% to 16.58 reais.

Iron-mining giant Vale SA was another of the biggest decliners in the index, with its preferred shares retreating 2.4% to 17.45 reais. Shares of beer maker Ambev SA fell 1.4% to 18.42 reais.

Meat packer Marfrig Global Foods SA had the biggest gain in the index, advancing 3.9% to 4.25 reais. Embraer SA's shares rose 0.5% to 24.26 reais after the aircraft maker said Monday at the Paris Air Show that it booked orders for more than 100 regional jets, including options.

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com

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