Ibovespa retreats 1% without relief on domestic problems By Reuters

© Reuters. B3 in São Paulo 7/25/2019 REUTERS/Amanda Perobelli

By Paula Arend Laier

SAO PAULO (Reuters) – It kept the negative bias on Wednesday, working below 115,000 points, without an effective relief in the repertoire of problems in Brazil and having on the radar the expiration of stock options at the end of the week.

At 11:56, the Ibovespa fell 1.01% to 115,007.74 points. The financial volume totaled 8.2 billion reais.

The attention, in the view of BTG Pactual, remains focused on the progress of reforms in order to consolidate local political relief, with emphasis on the negotiations on the spending ceiling and the outcome involving the issue of precatories.

Earlier, the Minister of Economy, Paulo Guedes, highlighted the need for understanding and help for the government to solve the problem of precatories, expressing confidence that this will be done in conjunction with the Legislative and Judiciary.

However, financial agents continue to see the situation involving the “stuck” issue, and fearful of a short-term advance, especially after the government’s setbacks in recent decisions in Congress.

Strategists at {{0|Itaú BBA}} cut the target price for the Ibovespa from 152,000 to 120,000 points, citing a deterioration in the country’s macroeconomic outlook, as well as increased fiscal risks and a challenging water scenario.

Earlier, the Central Bank announced that the growth was higher than expected in July, but the news did not cheer, mainly amid recent cuts in the projections for the expansion of the country’s economy in 2021 and 2022.

BTG Pactual (SA:) also drew attention to alternating moves between highs and lows produced by blue chips, which represent relevant positions in the stock option expiration that takes place on Friday.

“We noticed signs of investor caution, keeping their positions without new investments. Volatility is always much greater with the approach of maturities,” he says in an email to clients in the bank’s management area.

This Wednesday, the trading session is marked by the expiration of options on the Ibovespa.

On Wall Street, the advance was 0.1%, with papers from the energy and financial sectors recovering some of their losses, in a movement mitigated by the slowdown in the economic recovery and uncertainties about a higher taxation of companies.


– MÉLIUZ ON (SA:) fell 8.8%, after four consecutive rises, a period in which it gained more than 48%. In addition, {{0|Itaú BBA}} excluded the shares from its “Buy List”, after a strong rise in shares since entering the portfolio, considering that the momentum of the results in the short term will be weak.

– BANCO INTER UNIT (SA:) lost 4%, also undergoing adjustments after two consecutive appreciation sessions, in which it accumulated an increase of almost 10%, in a mostly negative trading session for banks, with ITAÚ UNIBANCO PN (SA:) and BRADESCO PN ( SA 🙂 giving about 1% each.

– VALE ON (SA:) showed a decrease of 0.5%, amid a new fall of futures in China to a minimum in nine months. In the sector, CSN ON (SA:) rose 1%, while GERDAU PN (SA:) rose 0.15% and PNA USIMINES (SA:) lost 0.4%.

– BRADESPAR PN (SA:) rose 7.2%, after approving the share bonus, as well as the distribution of Vale shares to its shareholders – which must be approved at the meeting on October 15 – and share split. Analysts assess that the move should reduce the holding discount.

– GOL (SA:) PN advanced 3.5%, with analysts positively evaluating the effect on the airline’s liquidity of an exclusive codeshare agreement with American Airlines (NASDAQ:) (SA:) valid for three years, in which it will receive a investment in shares of 200 million dollars (1.05 billion reais).

PETROBRAS PN (SA:) rose 1.2%, endorsed by the rise in prices abroad, in addition to positive assessments about the participation of the company’s CEO in a committee in the Chamber of Deputies the day before. In the sector, PETRORIO ON (SA:) recorded an increase of 3.7%.