February ended with a historic low for Ibovespa, the main index of the São Paulo Stock Exchange (B3).
The drop was 7.49%, at 104,000 points.
This is the worst mark ever registered in the month in 22 years.
Uncertainties in the global and domestic economic scenarios pulled Ibovespa down.
The index is the most important indicator of the average performance of the share prices negotiated on the B3.
With the arm wrestling between the government and the Central Bank (BC), the domestic situation worried investors, who fear some form of intervention in monetary policy.
In early February, the Central Bank’s Monetary Policy Committee maintained the basic interest rate, the Selic, at 13.75% per year.
The indications are that cuts in interest rates are not likely to happen soon because of the financial risk and prospects for higher inflation.
The economic package to adjust the public accounts presented by Finance Minister Fernando Haddad did not convince the market, which is still waiting for the new fiscal framework.
“We saw volatility caused by these factors, added to a more negative external scenario, which resulted in this realization of the Ibovespa in February,” said Ricardo França, an analyst at Ágora Investimentos.
Besides the political issue, the fourth quarter balances penalized banks, which had their results impacted by the Americanas retailer crisis.
Retail continues to suffer from the pressure on the yield curve.
EXTERNAL SCENARIO
In recent weeks, investors followed the new estimates for the “terminal rate” in the USA.
According to Bank of America, at the end of the monetary tightening cycle, the country should have interest rates between 5.25% and 5.5% per year, the highest level since 2007.
Today, the rate is between 4.5% and 4.75% per year.
Due to the economic crisis, the country led by Joe Biden faces an inflation rate that reaches 6.4% in 12 months, the highest in 40 years.
In addition, the concerns about a possible recession in the world’s main economy also negatively impact the other markets.
With US Treasury bonds yielding more and more, global risk assets lose their attractiveness, especially those linked to emerging countries such as Brazil.
With information from Revista Oeste