Stock exchange sustains gains supported by Petrobras and Vale; Wall Street recovers

The Brazilian Stock Exchange maintained its strong upward trajectory this Wednesday (26), repeating the performance recorded the day before. Foreign investors are attracted to the more solid sectors of the domestic market, such as commodities and banking.

Abroad, the market digests the signal from the Fed (Federal Reserve, the American central bank) that US interest rates should rise in March. As the feared anticipation of monetary tightening did not occur, the main indices traded in New York were on the way to recovery.

The Ibovespa rose 1.78%, to 112,083 points, at 16:58. On Tuesday (25), the country’s stock market benchmark jumped 2.10%, the highest daily percentage growth since the 3.66% rise noted on December 2, when the approval of the PEC on Precatórios in the Senate eased concerns about the government’s ability to meet the 2022 Budget.

Foreign investors have already invested around R$ 20 billion in the Brazilian market. They are looking for cheap stocks with upside potential, such as shares in some of the country’s biggest exporters of basic materials. The movement is making Brazil take off from the lows in the US stock market.

Despite the inflow of capital from abroad, the dollar was on its way to close a slight rise of 0.14%, quoted at R$ 5.44200, indicating a correction in relation to the drop of 1.30% the day before.

Brent crude was up 1.62% this afternoon at $89.63. The appreciation of the commodity benefits Petrobras shares, which jumped 3.15% a day after having soared 3.26%.

Increases in iron ore contracts exported to China generated gains for Vale. The mining company’s shares rose 0.94%.

These were the two assets with the greatest contribution to the rise of the Ibovespa this Wednesday. Bradesco and Itaú rose 0.23% and 0.66%, respectively, occupying third and fourth places among the companies with the greatest influence on the daily result of the index.

On Wall Street, the Dow Jones, S&P 500 and Nasdaq indexes advanced 0.43%, 1.69% and 1.87%, respectively. The recovery began even before the Fed’s announcement on interest rates, but gained momentum after the monetary authority’s bulletin.

After a 2021 of high gains, US stocks have seen a sharp correction in recent days. On Tuesday, Nasdaq, a stock exchange that concentrates technology companies still in the process of building up their cash position, collapsed 2.28%.

The performance of the technology sector pulled the S&P 500, a benchmark for the US market, to the bottom, which fell 1.22%.

Comprised of a few dozen large value companies, the Dow Jones index is less sensitive to rising interest rates. The indicator fell 0.19% on Tuesday.

The market fluctuates as investors look for clues about the next steps in the monetary adjustment that is underway in the United States amid the country’s highest inflation in four decades.

The central point under debate is the pace of raising basic interest rates in the country’s economy, which since the beginning of the pandemic have been close to zero. The loose monetary policy was adopted at a time when the stoppage of activities to face the transmission of Covid imposed the need to stimulate credit and job creation.

Now, interest rates need to go up because making credit difficult is one of the ways to take money out of the market and, thus, cool inflation.

Also on the market’s radar are the actions of Russia, which deploys troops in Ukraine’s border regions. An invasion could trigger a diplomatic and even military conflict involving the United States and other economic powers.

Russia is one of the biggest producers of oil, whose price is at the highest level in more than seven years. The course of the dispute could result in shortages, which could mean appreciation of the commodity and high fuel prices. It would be another boost to global inflation.