Uncertainties about the country’s fiscal situation for 2022 once again led the Brazilian Stock Exchange to close down this Monday (22).
The Ibovespa, the stock market’s benchmark index, dropped 0.89% to 102,122 points, renewing the worst mark in just over a year, which had already occurred last Thursday (18th). This second’s score is the lowest since November 6, 2020, when the indicator closed at 100,925 points.
Despite the advance in the perception of fiscal risk, the dollar fell 0.28%, to R$ 5.5940. Even so, the currency is at a level considered high, which leaves room for possible corrections.
In the international market, the American currency appreciated in relation to rivals after the reappointment of Jerome Powell as head of the Fed (Federal Reserve, the American central bank) for another four years.
The news that the release of resources by the PEC (proposed amendment to the Constitution) of the Precatório will not be enough to cover the promises of President Jair Bolsonaro (no party) for 2022 revived among investors the expectation of further increases in spending in the election year.
According to updated data released by the Ministry of Economy on Monday, the PEC will allow an increase of R$ 106.1 billion.
The amount is enough for mandatory expenses, expansion of Brazil Aid and extension of the payroll exemption, but it does not cover the other promises made by Bolsonaro, such as measures aimed at truck drivers, gas vouchers and salary readjustments for federal employees.
Banco Inter shares fell 14.11%, leading to widespread declines in fintechs, also influenced by the negative performance of the foreign technology sector and retail.
The pressure generated by fiscal risk was strong enough to put strong gains in the commodities sector on the back burner.
Vale (VALE3) rose 5.56%, recording the biggest gain in the trading session and also the top of the list of most traded securities.
Expectations of increased stimulus by the Chinese central bank raised iron ore prices on the international market.
“There is a very strong appreciation of ore in China and demand for equity products has increased for two consecutive weeks,” says Filipe Fradinho, technical analyst at Clear.
In addition to Vale, the country’s steel sector recovered losses accumulated recently with the slowdown in the Chinese economy.
Petrobras (PETR4) advanced 1.00%, following the slight appreciation of oil in the international market. Brent barrel rose 0.56%, to US$79.33 (R$442.93).
On Wall Street, the Dow Jones index rose 0.05%. The S&P 500 retreated 0.32% and the Nasdaq fell 1.26%.
After an opening with the main indexes renewing records, the market started to evaluate that the maintenance of Powell in the Fed would guarantee the increase of interest rates, disfavoring risky investments.
The day was one of negative results abroad for Brazilian companies that operate means of payment, called acquirers, which are responsible for the popular credit and debit card machines.
Listed in the US market, Stone fell 11.08% and PagSeguro retreated 7.03% after a report by Bradesco BBI downgrading the recommendations of the companies’ shares.
Stone dropped from neutral to below-market expected performance. PagSeguro, which belongs to the UOL Group –which has a minority and indirect stake in the Folha Group, which publishes Folha–, which had an above-average performance recommendation, had its score cut to neutral.
The BBI report points out, in general terms, a challenging scenario for the sector in 2022, highlighting the rise in interest rates.
Amidst fiscal uncertainty, the DI (Interbank Deposits) interest rate for January 2023, the reference for most contracts over the next year, advanced 0.29 percentage points this Monday, at 12.34% per year.
In the case of Stone, the Bradesco team also reported concerns about the considerable increase in costs due to the acquisition of the retail technology company Linx.
About PagSeguro, the report assesses the increase in operating costs while the company directs investments to PagBank.
Cielo, whose shares are on the B3 (Brazilian Stock Exchange), had its recommendation kept at neutral. The company’s shares retreated 3.64%.
The global context, however, is unfavorable for the acquirers sector, considering the results of other companies in the sector.
Payment methods company Square retreated 6.1% in the US market on Monday. The Indian multinational Paytm, whose IPO took place last week, has already accumulated losses of 37%, with a drop of 12.89% only in this trading session on the local stock exchange.
.
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
