Stock market retreats with fiscal deterioration on investors’ radar

In a session marked by greater aversion to risk on the part of investors, fearful of the possibility of approval of the Kamizake PEC and the fiscal framework, the Brazilian Stock Exchange, B3, maintains the downward trend observed the day before.

Around noon, the Ibovespa, the main stock index in the local market, was down 0.46%, quoted at 111,479 points.

At the same time, the dollar recorded gains of 0.34% against the real, trading at R$ 5.2700 for sale, after having closed in the previous trading session in a strong fall and at the lowest level in almost five months.

Market agents point to concerns regarding the submission of the PEC that seeks to relieve fuel as the main point of attention this Tuesday, which also included the release of the minutes of the Copom (Monetary Policy Committee) in the morning.

“In Brasília, the PEC Kamikaze continues to generate discomfort among investors, with Paulo Guedes starting to refer to the measure as a ‘fiscal bomb’, in which the government can waive up to R$ 110 billion in collection”, points out Guide Investimentos’ analysis team, in a report.

Caio Megale, chief economist at XP, says that the minutes of the Copom of the BC (Central Bank) brought a tone seen as more inclined to maintain the cycle of monetary tightening, due to fiscal risks in the scenario.

“The Central Bank seems to recognize the potential negative impact of initiatives related to tax exemptions, such as those related to fuel prices”, says Megale.

After the release of the minutes of a harsher tone by investors, BofA (Bank of America) revised its forecast for the Selic rate at the end of the cycle, in May this year, from 11.25% to 12.25%.

“The minutes of the last meeting have a more aggressive message than the communiqué released along with the decision. The BC stated that the deceleration of the rate of increase is the most appropriate way to achieve convergence of inflation to the target and re-anchor expectations, but it hinted that there will be more adjustments ahead, rather than an end in March as we had hoped”, say BofA analysts.

In the interest futures market, rates were operating sharply in the wake of the minutes. Contracts for January 2024 advanced from 11.37% the day before to 11.51%, while papers due in 2027 went from 11.11% to 11.18%.

In addition to concerns in the domestic scenario, falling commodity prices this Tuesday on a global scale drag papers with relevant weight in B3.

Petrobras’ preferred shares, for example, fell 1.49%, and common shares had a 1.83% devaluation, in the wake of the 1.78% drop in the price of a Brent barrel, a world reference. Despite the recent adjustment, the commodity remains at the highest price levels since mid-2014.

Guide analysts pointed out that the market should continue to monitor the movements of the leaders of the United States, France, Germany, Ukraine and Russia throughout the day, in search of a diplomatic outcome in the face of the mobilization of Russian troops on the borders with the eastern country. European.

In the United States, the main stock exchanges started the session this Tuesday without a defined trend and close to stability. The S&P 500 was down 0.01% around 11:50 am, while the Nasdaq was down 0.18%. The Dow Jones advanced 0.23%.

Pietra Guerra, stock specialist at Clear Corretora, adds that the reduction in global liquidity in the markets is also a point that is on the radar of international investors.

“In Europe, the highlight was the speech of the President of the ECB (European Central Bank), Christine Lagarde, who spoke this Monday and reinforced that the BC would be open to end asset purchases and increase interest rates before the end of the year. This is in response to this global increase in inflation that we have already been following”, says the Clear specialist.