The Brazilian Stock Exchange closed up 1.98%, at 105,550 points this Monday (1st). The gains were mainly stimulated by the good mood of the market regarding the failure of the truck drivers’ strike.
The dollar, however, rose again due to the ongoing process of investors seeking protection in relation to the country’s fiscal risk. The American currency advanced 0.49%, to R$ 5.67.
The truck drivers threatened to carry out a stoppage in protest against Petrobras’ fuel price policy, which follows a system of parity in relation to the price of oil on the international market.
A large mobilization, if it had taken place, could increase the market’s fear of possible interventions by President Jair Bolsonaro (no party) in the price system adopted by the state-owned company, with results detrimental to the company’s profits.
Bolsonaro, in turn, contributed to alleviating tensions involving Petrobras by commenting, also on Monday, that he is talking to the economic team so that the dividends that the government receives from the state-owned company are reverted to reduce the price of diesel.
The market believes that the speech indicates that the government is seeking solutions to reduce fuel prices without interfering with the state’s pricing policy, according to Vitor Carettoni, director of the variable income trading desk at Lifetime Investimentos.
Petrobras’ preferred shares, which were the most traded on the floor, rose 2.75%. Last Friday (29), the shares fell 5.90% after the company’s profit was the target of criticism from Bolsonaro the day before.
Nicolas Borsoi, chief economist at Nova Futura Investimentos, points out that Bolsonaro’s comments and the hollowing out of the truck drivers’ strike mitigate the risk of an expressive strike movement such as that which occurred during the administration of former president Michel Temer (MDB).
For the analyst, however, today’s high should not be seen as a reversal of discounts that the Stock Exchange has been suffering due to increased political and fiscal tensions in the country.
In October, the Ibovespa, the benchmark for the Brazilian stock market, dropped 6.7%. This was the fourth consecutive monthly drop.
“If we look at the interest and exchange markets, they are telling a story that is still one of aversion to local risks,” says Borsoi. “Interests closed on a high and the dollar returns to close to R$ 5.70.”
Contracts based on the DI (Interbank Deposits) interest rate for 2023 rose 2.75 percentage points this Monday, at 12.4% per year.
Nervousness with the fiscal issue persists while the government is unable to approve the PEC (Proposal for Amendment to the Constitution) of precatório in Congress, by which the Executive intends to postpone part of the payment of its recognized judicial debts and thus free up space for spending extras in next year’s Budget.
In the United States, the Fomc (the monetary policy committee of the Federal Reserve, the American central bank) is expected to release on Wednesday afternoon (3) details of its plan to withdraw economic stimulus created during the pandemic.
The decision is important for Brazil because it will reduce global liquidity and, among the consequences, may make international investors less likely to invest in emerging countries. The market, however, has been pricing this measure over the past few months, according to analysts.
In the US stock market, Dow Jones, S&P 500 and Nasdaq rose 0.26%, 0.18% and 0.63%, respectively.
Brent oil, a world reference, advanced 0.20%, to US$ 84.38 (R$ 478.33).
Among the highlights of the Stock Exchange this Monday, Banco Inter jumped 19.2%, after falling almost 24% in October, against the backdrop of details of the IPO of competitor Nubank in the United States, in an operation in which the rival seeks value over US$50 billion (R$283.4 billion).
Burger King soared 8.4% after the company announced the cancellation of an agreement with private equity firm Vinci Partners to buy Domino’s Pizza Brasil, citing adverse market conditions.
with Reuters
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