Brazil: Ibovespa fell to 98,000 points with interest rates on the radar

The Ibovespa fell to 98,000 points on Thursday (23), out of sync with the good mood of international markets.

Around noon (Brasília time), the index gave way to 0.5%, while the dollar advanced after new government criticism of the Central Bank.

Weighing on the Brazilian stock market are the fall of the shares of mining company Vale, in another day of fall for iron ore, in addition to the sharp decline of retailers in the B3 with the yield curve pressured after a more harsh statement from the Central Bank.

For example, shares of Magazine Luiza fell about 10% at noon.

Yesterday (22), the Monetary Policy Committee (Copom) kept the Selic at 13.75% per year for the fifth consecutive meeting.

In the communiqué released after the decision, the monetary authority cited an environment of uncertainties beyond usual, such as the fiscal framework – which should only be announced in April.

The text was seen as “hawkish” (i.e., favorable to higher interest rates), given that it showed that the Central Bank might resume the monetary tightening cycle if the disinflation process does not occur as expected.

In the United States, the Federal Reserve adopted a cautious tone, reiterating its priority in fighting inflation, stating that it is prepared to continue increasing interest rates until prices show signs of cooling.

However, Treasury Secretary Janet Yellen’s divergent message created confusion among economists.

That’s because she told lawmakers that the government is not considering “blanket” deposit insurance to stabilize US lenders, causing stocks in the sector to fall rapidly.

On Thursday, investors continue to digest interest rate decisions around the globe.

The Bank of England followed with another interest rate increase despite turmoil in the banking sector, raising its prime rate by 0.25 percentage points as expected.

The Swiss and Norwegian central banks had earlier tightened as expected and signaled more hikes in their campaigns to tame rising consumer prices.

Check out the markets’ performance on Thursday (23):

• The Ibovespa retreated 0.48% around noon, at 99,770 points;
• The spot dollar rose 0.68% to R$5.27;
• In the US, the indexes were rising: the Dow Jones was up 1.27%, the S&P 500, 1.58%, while the Nasdaq was up 2.31%;

With information from Bloomberg

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