Russian attack on nuclear power plant knocks out markets in Europe, the US and Brazil

Stocks around the world tumbled on Friday (4) after a dawn of tension created by the possibility of a nuclear catastrophe in a new episode of worsening the war in Ukraine.

Russian military forces seized the Zaporijia plant, the largest in Europe. The attack sparked a fire at the site. Before the fire was brought under control, there were fears of an explosion with potentially ten times the impact of the accident at the Chernobyl nuclear power plant, also in Ukraine, in 1986.

Ukrainian President Volodymyr Zelensky declared that an eventual explosion at the Zaporijia power plant would mean the “end of everything, the end of Europe”.

Reflecting investor concerns about the crisis, the Ibovespa dropped 0.60% to 114,473 points. In the weekly close, however, there was a gain of 1.18%. The appreciation since the beginning of this year reached 9.21%.

The commercial dollar advanced 0.99% and ended the day at R$5.0780. Despite the daily gain, the US currency closed the week down 1.49%. In the accumulated of 2022, the devaluation against the real is 8.93%.

Exchange and exchange express the maintenance of foreign interest in Brazil and other emerging markets with growth potential, while the main global exchanges return gains accumulated during the pandemic, when they were largely favored by stimulus policies adopted by central banks in their respective regions. .

In the first two months of 2022, the balance of investments by international institutions in the Brazilian stock market grew 130% compared to the same period in 2021.

European stock markets tumbled on Friday. The index that tracks the region’s top 50 companies that use the euro as their currency plunged 4.96%. The London Stock Exchange plunged 3.48%. In Paris, the drop was 4.97%. Frankfurt sank 4.41%.

In the United States, the main indicators also closed in the red. The S&P 500, the benchmark for New York-traded stocks, lost 0.79%. The Dow Jones and Nasdaq indexes dropped 0.53% and 1.66%, in that order.

In addition to concerns about the war, investors were impacted by government data that on Friday revealed higher-than-expected job creation in the United States. The economic upturn reinforces the expectation that the Fed (Federal Reserve, the American central bank) may aggressively raise benchmark interest rates in the country.

Interest rate hikes tend to take capital out of the stock market and into US Treasuries. This asset category, despite delivering modest returns, is extremely safe. This movement of investors, if it occurs intensely, also favors the global appreciation of the dollar against other currencies.

One of the main effects of the escalation of the crisis in Ukraine on Friday was the soaring of oil. The barrel of Brent, a world reference, jumped 6.74% at the beginning of the night, quoted at US$ 117.90 (R$ 598.36). It was the highest value since February 8, 2013, when the commodity rose to US$ 118.90.

In Asia, the Tokyo, Hong Kong and Shanghai stock markets closed with drops of 2.23%, 2.50% and 1.21%, respectively.

The aversion to risk caused by the takeover of the Ukrainian mill pressured the daily global rise of the dollar, which showed appreciation in comparison with 20 emerging currencies in a list of 24 currencies monitored by the Bloomberg agency.

As a result, the release of the Brazilian GDP (Gross Domestic Product) for 2021, also this Friday, took a back seat and had little effect on the domestic market in this session, according to Fernanda Consorte, chief economist at Banco Ourinvest.

Nicolas Borsoi, chief economist at Nova Futura, believes that the arrival of the weekend increased the pressure on risky assets, thus leading the Ibovespa to a negative close, since, in a scenario of war, the events of the next days are unpredictable.

“The worsening risk sentiment following the fire at the Zaporijia nuclear power plant leads to a more cautious stance in the markets,” he said.