Ibovespa drops more than 2% and flirts with new lows since March

Ibovespa
The Ibovespa had a devaluation of 2.51% at 11:48 am to 108,638.76 points (Image: REUTERS/Amanda Perobelli)

Expectation of monetary tightening in Brazil it is us U.S and the default in the Chinese real estate market this week pushed the main São Paulo stock market index downhill on Monday, seeking new lows in 2021.

Pressured above all by highly liquid securities, such as the giants of commodities Petrobras and Valley (VALLEY3) and of great banks, O Ibovespa had a devaluation of 2.51% at 11:48 to 108,638.76 points, the lowest intraday level since the beginning of March. The financial turnover of the session was 8.78 billion reais.

According to market professionals, the developer’s risk Chinese Evergrande not pay interest on debt that matures this week and next week should aggravate the deceleration of the economy.

This worsened the forecasts for the world economy, whose recovery from the effects of the pandemic was already suffering setbacks in Europe and the United States with the spread of the Delta variant, bringing down commodities such as iron ore and oil.

“Furthermore, attention is focused on the Fomc meeting on Wednesday, which may bring details on the reduction of the asset program,” said Bradesco’s economic research team in a note to clients referring to a meeting of the investment committee. monetary policy of Federal Reserve, on Wednesday.

Simultaneously, the central bank Brazil also announces the new interest rate on Wednesday, with market consensus that the Selic is raised by 1 percentage point, at 6.25% per year, which could further reduce the forecast of high Brazilian GDP in 2022, while still facing inflation high.

“This environment can weigh on sectors that depend on both affordable credit lines and more economic stimulus,” said Pietra Guerra, stock specialist at Clear Corretora.

Highlights

Valley (VALLEY3) fell 3.8%. On Friday, UBS cut the recommendation for the action from ‘buy’ to ‘sell’, estimating that an iron ore surplus of around 150m tonnes is expected to grow in 2022.

Petrobras (PETR4) lost 2.9%, in the wake of the fall in international oil prices.

Bradesco (BBDC4) retreated 2.45%, leading losses among large Brazilian banks. Itaú Unibanco (ITUB4) gave 2.1%.

Interbank (BDID11) declined by 5.4%, with investors preferring to sell stocks with high appreciation in recent months to pocket gains.

Copel (CPLE6) rose 5.4%, one of the few highs in the index. The electric company from Paraná informed on Friday that it will distribute 1.437 billion reais in remuneration to shareholders, to be paid on November 30th.

(Updated at 11:49)