RIO DE JANEIRO, BRAZIL – It’s all right that there were only three trading days because of Carnaval. Still, the Ibovespa, virtually unaffected by the war in Ukraine, was able to show the world last week that this self-sufficient giant country is likely to be one of the few to stand tall in times of crisis.
Despite heightened tensions on the military, money, and propaganda/media front, the Brazilian stock market has not felt the shock as much.
While European indexes such as Paris’ Cac 40 and London’s FTSE 100 posted weekly losses of 8.4% and 6.7%, respectively, and New York’s Dow Jones slipped 1%, the Ibovespa closed the week up 2.21% at 114,473 points.
The highlight of the week was metal commodity companies. With iron ore prices at US$153 per ton, the highest level in six months, companies such as Vale, which has the most significant weight in the index, gained more than 10% in the three days of the week combined.
Although oil prices also rose during the period, Petrobras shares were parked because of the risk of interference in the company’s pricing policy.
The fact is that foreigners also have an appetite for Brazil during the war because, since the beginning of the conflicts, gringos have already invested more than US$8 billion in the Brazilian stock market, money that also helps the dollar to give way against the real.
The American currency fell 1.5% last week to 5.07 reals. How long will this money keep flowing? No one knows, but the war scenario is likely to cause more volatility in the markets.