Ibovespa accumulates high in 2022 for the first time

The commodities and retail sectors raised the Brazilian Stock Exchange this Wednesday (12). Investors also didn’t flinch at the biggest rise in US inflation in nearly 40 years, which favored equities and reduced pressure on currency and interest rates.

The Ibovespa, the stock exchange’s reference index, rose 1.84%, closing at 105,685 points. This result led the country’s stock market to accumulate a gain of 0.82% in 2022. It is the first time this year that the indicator closes in the blue. Making the opposite movement, the dollar fell 0.78%, to R$ 5.5350.

On the same day that fuel prices at refineries increased, Petrobras’ preferred shares appreciated by 3.05%. The state-owned company made the biggest contribution to the rise of the Ibovespa in the session.

The increase in fuels occurs amid the rise of oil in the international market. A barrel of Brent rose 1.21% to US$ 84.73 (R$ 471.14).

Faced with the reluctance of governments to adopt restrictions to contain the omicron variant, commodity prices advance with the growing expectation that the demand for fuel will increase. The price of a barrel could close 2022 at around US$ 100 (R$ 556), analysts told Reuters.

Mining and steel sectors advanced in the face of the appreciation of iron ore in China. The market expects a stimulus package from the Chinese government, which has generated “a positive mix for the Ibovespa”, highlighted Nova Futura. Vale’s common shares closed up 1.09%, making the second largest positive contribution to the Ibovespa.

Shopping malls and large Brazilian retail chains concentrated the highest increases among the companies that make up the Ibovespa.

Multiplan’s fourth-quarter sales balance drove gains in the sector’s shares, according to Ygor Altero, real estate manager at XP. “Selling patterns showed a very strong recovery,” he said.

The shopping center network reported this Wednesday that its establishments exceeded the level seen in 2019 for the first time, that is, before the pandemic.

Sales totaled R$5.6 billion, an increase of 8.1% over the same period in 2019. According to the company, sales in the fourth quarter were the highest ever recorded in a single quarter in Multiplan’s history. The apparel segment grew 19%, the company said.

Multiplan’s shares rose 6.54%. In the same segment, Iguatemi and BR Malls advanced 8.31% and 5.93%, respectively.

Magazine Luiza and Lojas Renner had increases of 7.5% and 5.98%, in that order.

Retailers were also benefited in the session by the flattening of future yield curves, according to Rodrigo Crespi, an analyst at Guide. “These are assets of the domestic economy, which are very subject to the yield curve”, commented Crespi.

Interest on DI (Interbank Deposits) contracts for 2025, for example, dropped 0.33 percentage points, to 11.19% per year. It is the first drop after seven consecutive highs. Lower interest rates reduce the operating cost of credit dependent companies.

Analysts attributed the decrease in the yield curve in Brazil to the absence of surprises in the release of December inflation in the United States. Although last year’s 7% annual increase was the biggest since 1982, the indicator came in line with experts’ projections.

This lowered investors’ expectations of further announcements of accelerating interest rate hikes in the United States, which in Brazil could result in pressure on the exchange rate and, consequently, on inflation and interest rates.

The escalation of inflation in the United States has forced the Fed (Federal Reserve, the American central bank) to discuss the acceleration of the withdrawal of economic stimuli created to face the crisis of the pandemic. The increase in interest rates is at the heart of the monetary policy debate in the country.

Higher interest rates make investments in the US Treasury more interesting and, consequently, attract capital that was once invested in stock exchanges. Emerging economies, such as Brazil, are particularly affected by this process.

The absence of surprises regarding inflation helped the American market to close higher. The Dow Jones, S&P 500 and Nasdaq indexes rose 0.11%, 0.28% and 0.23%, respectively.