The Ibovespa, the reference index of the Brazilian stock exchange, closed up 0.59% this Friday (19), at 103,035 points, interrupting a series of four consecutive falls. In the week, however, the indicator retreated 3.03%. The accumulated drop in the year is 13.42%.
The dollar rose 0.73%, to R$5.6100, reflecting investors’ expectations with the possibility of an increase in interest rates in the United States. The appreciation in the week was 2.78%. In the year, the American currency accumulates gains of 8.11% against the real.
The expectation is that the Fed (Federal Reserve, the American central bank) will accelerate the withdrawal of economic stimuli adopted during the pandemic, after consumer inflation in the country has reached the highest level in 30 years.
The stock market was pulled by Vale and steelmakers, in the wake of the advance in the price of iron ore futures contracts, and by telecommunications companies due to a decision by the STF (Supreme Federal Court) in favor of the sector.
Vale advanced 2.73% and CSN jumped 7.98%, the highest increase in the trading session.
Shares of Telefônica Brasil and TIM rose 6.81% and 5.15%, respectively, after STF ministers formed a majority for the reduction of ICMS for telecommunications services in Santa Catarina, in a decision that could be applied to the entire country.
Investors continued to follow the development around the PEC (proposed amendment to the Constitution) of the Precatório, but the lack of relevant news on the subject gave space to a slight recovery in business.
The PEC, which authorizes a dribble in the spending ceiling, defaulting on the Union’s judicial debts in 2022, is evaluated by the market as a way out for the government to be able to pay Brazil’s Aid and, thus, be able to close the next year’s Budget .
This Friday’s daily gain does not represent, however, a change in market direction, according to Bruno Madruga, variable income director at Monte Bravo Investimentos. “Only correction within a downtrend in the market,” he said.
Brent crude dropped 3.43% to $78.45 (BRL 436.00), the lowest price since Sept. 24, when a barrel closed at $78.09.
Concerns about the advance of Covid-19 in Europe and the possibility of the governments of the United States and China using strategic reserves to lower prices are among those responsible for the devaluation of oil.
“Fear of the unknown is weighing on market sentiment,” said Phil Flynn, senior analyst at Price Futures.
Brent oil has risen nearly 60% this year, as economies recover from the pandemic and the Organization of Petroleum Exporting Countries and its allies only gradually ramping up production.
The weak performance of the commodity on the day hurt Petrobras shares, which closed down 1.66%.
Petrobras also informed this Friday that it will not meet 100% of orders from distributors for fuel in December, amid the maintenance of a scenario of atypical demand seen also in November.
On Wall Street, the Dow Jones and S&P 500 indices fell 0.75% and 0.14%. The Nasdaq rose 0.40%, with a record result of 16,057 points.
The prevailing bias in global markets, however, was bearish this Friday with the tension generated by the advance of Covid-19 in Europe.
Austria has announced new restrictions to deal with rising cases of coronaviruses, and the market fears Germany will follow suit.
with Reuters
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