RIO DE JANEIRO, BRAZIL – The São Paulo stock exchange fell by 1.11% on Thursday, amid the back-and-forth of the reforms in the Brazilian Congress and the misgivings generated by the fiscal strategy of the government of the ultra-right-wing president Jair Bolsonaro among financial agents.
The Ibovespa index, the reference of the trading floor, closed at 120,700 points and continued its third consecutive fall in a week marked by caution due to Brazil’s political and fiscal tensions.
Economic operators fear a worsening of the public deficit with the new social aid program proposed by the government, the postponement of the payment of the federal government’s judicial debts, and the difficulties to move forward with the tax reform.
On this last point, the President of the Chamber of Deputies, Arthur Lira, had planned to put the part of the reform involving income tax to a vote this Thursday. Still, in the end, he had to postpone the analysis of the text until next week due to the resistance of most of the parties in Congress.
In the currency market, the US dollar appreciated by 0.66% against the real and closed at 5.25 reais for buying and selling at the Brazilian commercial exchange rate.
In a day of high volatility, the volume traded reached 33.4 billion reais (about 6.4 billion dollars), in a total of 4,128,967 financial operations.
The fuel distributor Ultrapar led the session’s losses with a 12.3% drop in its common shares after quarterly results that were worse than expected by the market. In the same vein, meat packer companies Minerva and JBS fell by 11.3% and 5.85%, respectively.
In contrast, it was a good day for health insurance companies, with robust increases for NotreDame Intermédica (6.9 %), the Hapvida group (6.4 %), and SulAmérica Seguros (2.8 %). Fleury Laboratories (4.0%) and the Raia Drogasil drugstore network (2.75%) also advanced.
The most traded shares on Thursday were the preferred shares of the state-owned oil company Petrobras (1.5%) and the common shares of the mining giant Vale (-0.06%).