Brazil: renewed rapid rise in the dollar and further decline in the stock market due to uncertainty over economic policy
Uncertainties in relation to economic policy hindered the performance of the financial market for the second day in a row.
The Ibovespa, the leading indicator of the stock market, closed the day at 104.1 thousand points, a fall of 2.1%.
The dollar surpassed the R$ 5.45 barrier, closing at R$ 5.4520, 1.75% more than Monday.
The interest of the Interfinancial Deposit (DI) contract for January 2024 rose from 13.53% to 13.72% per year.
Analysts and operators point out that the market has been seeking predictability. And the signs are not favorable for the short term.
President Luiz Inácio Lula da Silva’s (PT, progressive-globalist) decision not to immediately revoke the federal tax relief on fuel prices, contradicting the point of view of Finance Minister Fernando Haddad, and impasses on regulatory issues, such as those related to privatizations, were not well seen by the market.
“The extension of tax relief has amplified uncertainty about the conduct of fiscal policy,” Bloomberg cites.
Another aggravating factor was the defense of the Minister of Social Security, Carlos Lupi (PDT), of the need to review the pension reform.
According to the Valor outlet, he intends to prove that social security is not in deficit.
The dollar rate was also pressured because of expectations of new interest rate hikes in the United States.
The minutes of the December Procom meeting should be released this Wednesday. The fear is that further interest rate hikes will be promoted, which makes US bonds even more attractive.
This ends up favoring a solid appreciation of the dollar.
More: Brazil news in English, every day from The Rio Times.
Live Market IntelligenceBrazil — Live Market Board
Rio Times · Live Market Intelligence
Brazil — Live Market Board
+1.38%
209,066.90
+1.38%
66,048.57
+1.63%
11,043.36
+0.17%
2,828,027
-0.16%
2,531.15
+0.21%
60,956.11
-0.27%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 209,066.90 | +1.38% | +21.85% | 206,220.24 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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