War fears in Europe shake markets again

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Investors worried about the possibility of a war in Europe led the main stock markets on the planet to operate in the red this Monday morning (14). The Brazilian Stock Exchange and that of other emerging economies rose slightly, indicating the maintenance of the global search for cheap assets amid the lows in developed countries.

At 11:49 am, the Ibovespa rose 0.24% to 113,850 points. The dollar retreated 0.62%, to R$ 5.2120. Stock exchange and exchange still reflect the large volume of foreign investments in the Brazilian market, which exceeded R$ 30 billion in January. Stocks in Argentina, Peru and Mexico also advanced 0.12%, 0.43% and 1.20%, respectively.

In Europe, the main stock market indicators were falling sharply. The London, Paris and Frankfurt Stock Exchanges lost 1.48%, 2.45% and 2.21%, in that order. The Euro Stoxx 50 index, which tracks 50 large companies in the region, plunged 2.37%.

In the United States, the main indices fluctuated at the opening. The S&P 500, the benchmark for the American market, dropped 0.25%. The Dow Jones, the most traditional indicator of the New York Stock Exchange, fell 0.63%. Shares of technology companies traded on the Nasdaq rose 0.17%, indicating a slight recovery from last week.

The opening of the American market, however, started better than the index futures trading indicated in the early hours of the day. There was some relief after Vladimir Putin’s government showed signs of being ready for a diplomatic solution to the West.

Asia had a negative start to the week, highlighting the 2.23% drop in the Tokyo Stock Exchange. In China, the main index of companies listed in Shanghai and Shenzhen fell 1.08%.

The global stock market was shaken last Friday afternoon (11) by the American government’s warning about the imminence of an invasion of Ukraine by Russia.

A White House national security adviser said the Russian military offensive could begin even before the end of the Beijing Winter Games on Feb. 20.

The main stock indices traded in New York began to operate sharply lower after the alert, which interrupted an attempt to recover on Wall Street. On Thursday (10), the US market had already been plunged into pessimism due to the release of a worse-than-expected inflation indicator.

Faced with this risk and tension scenario, oil prices remain at the highest level since 2014, despite some fluctuations. Russia is one of the main producers of oil and natural gas, being responsible for a significant part of Europe’s supply.

“We know that a potential conflict can reduce the global supply chain,” says Pietra Guerra, an equity specialist at Clear Corretora.

For the Brazilian stock market, the crisis in Europe leaves the horizon uncertain. On the one hand, the rise in the price of oil can increase the value of shares in Brazilian oil companies, such as Petrobras. On the other hand, more expensive fuel can accelerate inflation around the world and in the United States in particular.

The Fed (Federal Reserve, the American central bank) and other central banks are already discussing raising their interest rates to fight a worldwide inflationary wave.

If US interest rates rise beyond expectations, the reasonable appreciation of US Treasury bonds tends to attract investors who are currently investing in emerging markets, such as Brazil. That would make the dollar more expensive and put further pressure on inflation here.

A barrel of Brent oil, a world reference, was traded at US$ 94.04 (R$ 488.82), an increase of 0.37%.

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