RIO DE JANEIRO, BRAZIL – The previous record had been reached on July 10th, when the Ibovespa index closed at 105,817 points.
In yesterday’s session, the stock market increase was boosted by relief in the trade tension between the United States and China, by expected lower interest rates in Brazil by the end of the year and by the vote on the Welfare reform.
According to the Focus bulletin, a Central Bank survey of financial institutions released yesterday, October 21st, the SELIC rate – the economy’s basic interest rate – should close 2019 at 4.5 percent per year, compared to a previous estimate of 4.75 percent per year. Interest rates should drop since inflation is low.
The expectation of lower interest rates has attracted interest in the stock market, which is promising higher yields with higher risks. However, the lower SELIC increases the price of the dollar. The US currency closed this Monday sold at R$4.13, up 0.27 percent.
On Twitter, President Jair Bolsonaro celebrated Ibovespa’s historical record.
He mentioned the improvement of other economic indicators, such as formal employment, to show that the Brazilian economy is recovering its credibility.
“Ibovespa in a new historical record; more than 760,000 formal jobs created since the beginning of our government; recovery indicators in the economy with investor confidence; Brazil risk in decline, as well as crime. After decades of destruction, Brazil is rising again,” wrote Bolsonaro, while on his official visit to Japan.
Source: Agência Brasil