Stock market rises after support for Lula from economists of the Plano Real

The Stock Exchange hit a high earlier this Thursday (6th), against the foreign market, with the market evaluating a demonstration by economists linked to the creation of the Real Plan in favor of the candidacy of former president Luiz Inácio Lula da Silva ( PT).

At around 11 am, the Ibovespa index, a benchmark for the Brazilian stock exchange, rose 0.77% to 118,109 points, despite the unfavorable international context, with the main indicators of the global stock market down.

Economists Edmar Bacha, one of the fathers of the Real Plan, and Pedro Malan, former Finance Minister of Fernando Henrique Cardoso, released a note this Thursday declaring that they will vote for Lula in the second round of the presidential election.

Economists Armínio Fraga, former president of the Central Bank, and Persio Arida, another economist who participated in the formulation of the Real, had already announced this option, but also signed the note.

The four affirm that the expectation is that the PT candidate will lead the economy responsibly.

Analysts had already signaled the expectation that the tight result of the first round, with President Jair Bolsonaro (PL) having achieved a vote above expectations, would force the PT candidate to dialogue with names aligned with the financial market.

“The market is enjoying this support from the people who participated in the Real Plan for Lula”, says Luiz Carlos Corrêa, a partner at Nexgen Capital. “This shows that Lula is moving away from the left a bit and going more towards the center”, he commented.

Ilan Arbetman, research analyst at Ativa Investimentos, says there is no clear catalyst on the market this Thursday, but considering that abroad is retreating even with the disclosure that unemployment insurance claims have increased in the United States – this data is usually read as a sign of the reduction of inflationary pressure—, the elections explain the improvement of the stock market in Brazil.

For Arbetman, the market sees “an extension of the message from the polls, which elected more governors, senators and right-wing deputies”, he says. This creates the expectation that Lula, if elected, could “go more to the center” or “at least open a dialogue with the right”, he commented.

The momentary good mood of the local stock market was not enough, however, to stop the rise of the dollar, whose price was advancing against the main world currencies in the face of concern about the impact on inflation of the cut in oil production announced the day before.

In Brazilian exchange, the spot commercial dollar rose 0.28%, quoted at R$ 5.2020.

This Wednesday (5), the Brazilian stock market advanced, driven by companies linked to the production and export of oil.

This appreciation of the energy sector came in the wake of the expressive cut in production of the raw material, announced a few days ago and confirmed this Wednesday by the cartel of producing countries and their allies, known by the acronym OPEC+. The cut volume surprised the market.

The Ibovespa, a parameter index of the Brazilian Stock Exchange, closed with a gain of 0.83%, at 117,197 points. Petrobras’ most traded papers jumped 3.76%. 3R Petroleum advanced 3.49% and PetroRio climbed 3.20%.

The growth of investments in the Brazilian stock exchange in this session was not enough to avoid the rise in the exchange rate. The spot commercial dollar advanced 0.34%, at R$5.1870 on sale.

The daily supply of oil will be reduced by around 2 million barrels a day, which represents the biggest cut since the beginning of the Covid-19 pandemic in March 2020.

Restricting supply is OPEC’s strategy to raise prices, which fell by more than 20% in the third quarter due to the increased perception that the international scenario of high interest rates to curb inflation could severely damage the growth of the world economy. .

The barrel of Brent oil rose 1.99% in the late afternoon, quoted at US$ 93.63 (R$ 488.16), the highest value since mid-September. Since the beginning of the week, when OPEC’s intention to cut was announced, the raw material has already risen almost 6.5%.

The rise of 1.54% in Vale shares also exerted a positive weight on the Ibovespa, whose traded volume was the highest in this session.

The mining company’s appreciation took place on the same day that the Asian financial market reflected on China’s decision to reduce the cost of credit for financing in the housing area. The country is the main destination for iron ore and steel produced in Brazil.

This stimulus from the Chinese government was responsible for the 5.90% jump on the Hong Kong Stock Exchange this Wednesday.

Regardless of the movements in the energy and basic materials sectors in this session, Brazil’s stock market rose 6.5% this week, also reflecting the optimism on the part of investors with the result of the first round of elections, which confirmed the dispute between the President Jair Bolsonaro (PL) and former President Lula (PT) in the second round.

Analysts said the fierce dispute with Bolsonaro, a candidate perceived as having a more liberal view, will force Lula to nod and present names more aligned with the market.

If, on the one hand, the rise in oil has brought gains to markets influenced by the price of raw materials, on the other hand, it adds more concerns to the inflationary crisis that has been catapulting interest rates around the world.

The need for an exaggerated increase in the price of credit is feared by investors because it could impose a strong slowdown in the world economy, the effects of which would be a generalized fall in investments in companies and, consequently, an increase in unemployment.

The main indexes traded in New York’s financial district of Wall Street fell on Wednesday after delivering two days of consistent gains earlier this week.

The S&P 500, parameter of the New York Stock Exchange, closed the day down 0.20%. Dow Jones and Nasdaq dropped 0.14% and 0.25%, respectively.