Ibovespa shows uncertainty with Vale’s decline and corporate news on the radar By Reuters


© Reuters. Iron ore at a Vale mine in Carajás, Parauapebas 7/29/2012 REUTERS/Lunae Parracho

By Paula Arend Laier

SAO PAULO (Reuters) – The São Paulo stock exchange did not show a steady trend this Tuesday, with pressure from the fall in Vale shares, in the wake of the retreat in China’s prices, while Sul América (SA:) and MRV reacted positively to corporate news.

At 11:07, the Ibovespa fell 0.12% to 119,599.87 points. At the very least, earlier, it even dropped to 119,297.62 points. At the maximum, it reached 120,156.94 points. The financial volume totaled 4.75 billion reais.

Amidst operations aimed at the end of the month, with the Ibovespa heading towards a decline of 1.8% in August so far, financial agents are also monitoring developments in Brasília, with potential effects on the fiscal situation and on the behavior of prices in the country .

It is expected that the government will send Congress its budget proposal for 2022, as well as the disclosure of the readjustment value of the electricity tariff is expected.

Earlier, the IBGE announced that Brazil reached the end of the second quarter with a drop in employment due to the increase in employment, to 14.1%, but still with 14.4 million people out of work and the market still seeking to recover of the recent crisis.

The Central Bank also reported that consolidated public sector spending on interest jumped to 45.119 billion reais, compared to 5.838 billion reais in the same month last year, reflecting the weight on government accounts of variables such as inflation and higher .

In the view of the chief economist of the digital bank Modalmais, Alvaro Bandeira, investors in Brazil are stressed with the tense political environment, expectation of large demonstrations for and against the government on the next 7th, class entity manifestos, reforms that are not going ahead and water crisis.

In addition, he added, there are still expectations of populist measures. Overseas, Wall Street showed major stock indices falling, particularly affected by declining tech papers, while data from China showed that growth in manufacturing activity slowed more than expected in August.

Highlights

MRV ON (SA:) rose 5.3%, against the backdrop that the construction company’s board of directors approved a new buyback program of up to 24.145 million shares. In the sector, Cyrella ON (SA:) advanced 2.9%. Sul América UNIT (SA:) appreciated 3%, after presenting an unsolicited binding proposal for the acquisition of up to 100% of the capital of Grupo HB Saúde for 485 million reais. Vale ON (SA:) was down 1.9%, affected by the decline in iron ore prices in China, with shares in the mining and steel sector of the Ibovespa as a whole in the red. CSN ON (SA:) lost 2.8%. Petrobras PN (SA:) retreated 1.5%, following the weakness of prices in the foreign market. Investors also echoed President Jair Bolsonaro’s comments earlier this Tuesday about starting “now working on the fuel price issue.”

Itau Unibanco PN (SA:) rose 1.2% and Bradesco PN (SA:) rose 1%, with bank papers accounting for relevant support to the Ibovespa. Alliar ON, which is not on the Ibovespa, plummeted 10.7% after Rede D’Or (SA:) São Luiz gave up on launching a public offering (OPA) for the acquisition of the medical diagnostics company. Rede D’OR was still up for auction due to a block trade operation. Stoneco was losing 2% in New York, after reporting last night an adjusted net loss of 150.5 million reais in the second quarter, reversing a positive result a year earlier, with an extra provision, after admitting to having been surprised by failures in its business credit.