RIO DE JANEIRO, BRAZIL – Monetary tightening and concerns about the Omicron variant of Covid-19 abroad undermined the resilience of the Brazilian stock market on Friday morning, December 17.
After closing high the day before, despite the drop in the U.S. market, the Ibovespa, the main index of the Stock Exchange, was down 1.01% at 107,230 points at 11:01 AM on Friday.
The dollar rose 0.40% to R$5.7030, reflecting investors’ search for security in a global scenario of lower liquidity.
After the Fed signaled three interest rate hikes to address inflation in 2022, the Bank of England became the first monetary authority among the world’s 7 main economies to raise interest rates since the start of the pandemic.
The European Central Bank slightly trimmed emergency stimulus, although it pledged to maintain economic stimulus next year.
European stocks fell on Friday on concerns over reduced stimulus at a time when the rapid spread of the Omicron is rekindling fears of stalled economic activity.
“The general trend of monetary policy tightening seems clear, although the different paths taken by central banks underscore the deep uncertainties about how the rapidly spreading Omicron variant will affect economies,” XP said in a note on Friday.
The Central Bank of Japan on Friday also reduced emergency funding adopted in the pandemic.
An index of China’s major stocks closed Friday with the largest weekly loss in 3 months, as local and foreign investors worried about U.S. regulatory restrictions.
The CSI300 blue-chip index fell 1.59% over the day and lost 1.99% in the week.
Washington on Friday imposed investment and export restrictions on dozens of companies from the Asian country, including drone manufacturer DJI, accusing them of complicity in oppressing the Uighur minority or aiding the military.
The Brent oil was down 1.64% at US$73.79.