Ômicron and uncertainties push the stock market to another drop

After trading part of the day on a high, the Brazilian stock market closed on a fall this Wednesday (1st). Investors reacted poorly to signals that reinforce the anticipation of monetary tightening in the United States and the advance of the omicron variant of the coronavirus around the world.

In the domestic scenario, the PEC (Proposed Amendment to the Constitution) of the Precatório moves slowly through Congress, raising concerns about the country’s fiscal balance.

The Ibovespa, the main index of the Brazilian stock exchange, closed the trading session with a drop of 1.12%, to 100,774 points. The day’s retraction renewed its worst result since November 5, 2020.

A refuge for investors in periods of uncertainty, the dollar rose 0.60% to R$5.6710. Citi raised its forecast for the level of the US currency at the end of next year. Projects that the currency will remain at R$ 5.59.

The fall in the stock market came after a promising session opening. The Ibovespa reached a high of 2.13% at 12:12 pm, when it reached a maximum of 104,086 points.

The change in bias came in the afternoon after new statements by the chairman of the Fed (Federal Reserve, the US central bank). Jerome Powell reinforced signs that the US monetary authority will accelerate the withdrawal of economic stimulus to try to curb inflation.

Powell, on his second day of a US Congressional hearing, said monetary policy will need to adapt to the possibility that inflation does not retreat in the second half of 2022, as expected.

“Almost all analysts expect inflation to drop significantly in the second half of next year,” Powell said. “The point is, we can’t act like we’re sure about it. We have to use our policy [monetária] to address the range of plausible outcomes, not just the most likely,” he said.

“The Ibovespa lost strength after a new speech by Powell, in the same line as the speech on Tuesday (30)”, said Rodrigo Crespi, market specialist at Guide Investimentos.

New York’s main stock indexes also lost steam after Powell’s speech and went into the red at the end of trading, with the disclosure of the arrival of the first case of the new variant of the coronavirus in the country.

Rafael Ribeiro, an analyst at Clear Corretora, highlighted that the speed with which the omicron variant advances is putting investors in a defensive position regarding the possibility of new lockdowns around the world.

Ribeiro replied to a statement by Johanna Kyrklund, which defines the allocation of the manager Schroders, responsible for more than US$ 970 billion (R$ 5.4 trillion) in assets.

“I don’t think it’s time for investors to flee risk entirely. But the uncertainties are too great for this to be called a buying opportunity,” Kyrklund said.

Assets linked to some of the sectors most vulnerable to measures to restrict movement to fight the pandemic, such as retail, were among the main casualties of the Brazilian stock exchange this Wednesday.

Magazine Luiza gave 11.79% and Via lost 8.29%. Both appeared among the biggest casualties of the day.

Rodrigo Crespi, from Guide, pointed out that the interruption of the Ibovespa hike occurred, however, even before the worsening of the international scenario, given the difficulties in negotiating for the approval of the PEC dos Precatórios in the Senate.

The yellow light was turned on when the first news came that the government is still discussing possible changes to the text. “That made investors more defensive,” he said.

The financial market assesses the PEC as an alternative for the 2022 Budget to include Brazil Aid, making the fiscal scenario for the next year less unpredictable.

Crude Oil dropped 3.16% and hit its lowest level since Aug. 20. Brent barrel closed at US$68.34 (R$383.81).

The devaluation of the commodity did not prevent Petrobras from holding a 0.58% increase in its preferred shares, the most traded on the floor.

This Tuesday (30), the state-owned company concluded its first refinery sale operation since it decided to dispose of half of its refining capacity. For R$ 10.1 billion, the Landulpho Alves Refinery, in Bahia, was transferred to the Arab fund Mubadala Capital.

Vale’s shares rose 0.40%, still reflecting the strong hikes achieved in recent days by iron ore contracts, despite a slight 0.55% drop in the commodity in spot trading in China on Wednesday.

Markets in Europe closed with significant highs, with trading sessions ending before the sharpest drops in the main New York indices. The London, Paris and Frankfurt stock exchanges rose 1.55%, 2.39% and 2.47%.