RIO DE JANEIRO, BRAZIL – Holiday Monday. That was some analysts’ definition of Monday’s trading session. The R$25 (US$4.8) billion volume in the Brazilian stock market is considered low and explained by the political and economic uncertainties that hang over Brazil.
Banks were the positive highlight, reacting well to the Focus Report’s revised projected SELIC rate, up from 7% to 7.25% a year until the end of 2021. BTG, Itaú and Bradesco stocks closed up 3.78%, 1.10% and 0.34%, respectively, as banks tend to benefit from higher interest rates.
“While international markets are renewing their highs, we are 10,000 points below ours. It is dull. It’s hard to find anyone brave enough to take a stand before such political and economic noises,” says Órama Investimentos’ chief economist Alexandre Espirito Santo. The Ibovespa closed up slightly (0.17%) at 123,019 points.
Uncertainties in the domestic scenario are also reflected in the dollar, closing up 0.21% after another volatile session. The American currency is quoted at R$5.247.
“The week will be of ups and downs. Friction between the Executive and the Judiciary and the voting of bills such as the tax reform and the printed ballot will be decisive for the market. Meanwhile, investors will continue speculating and the currency will remain volatile,” says Ourominas’ foreign exchange director Mauriciano Cavalcante.
The day was also bad for commodities investment. The iron ore futures contract in Dalian closed down 4.4%, while Brent crude oil retreated 1.97%. Petrobras and Vale, the most impacted, closed the day down 0.70% and 0.63%.