RIO DE JANEIRO, BRAZIL – In Brazil on Thursday, the Ibovespa stock index fell 0.11%, closing the month of September at 110,979 points. This is the third consecutive month the index has closed down. In the year-to-date, the index has slumped 6.75%.
The negative trend started in the very first sessions of September, with the index dropping 3.78% after the anti-democratic protests called by President Jair Bolsonaro on September 7. However, the main downward factors were foreign.
The Federal Reserve (Fed) indicated that it should begin the process known as tapering in November, which consists of gradually reducing the volume of asset purchases. High inflation in the United States also feeds the prospect of an earlier than expected rise in interest rates, stressing the stock markets.
“The market already knew that this stimulus reduction would occur, but didn’t like the timing. After all, it’s US$120 billion a month injected into the economy,” says EWZ Capital’s equity specialist Rafael Bombini.
Another point of uncertainty came from China. “Over there, this month we faced the potential collapse of Evergrande, an energy crisis that affected the industry, and indications of an economic slowdown. This is reflected worldwide,” says RB Investimentos’ strategist Gustavo Cruz.
In addition to the issues that weighed negatively throughout the month, yesterday the American stock markets were affected by the lack of definition in the political arena. It was only in the late afternoon that Republicans and Democrats reached an agreement on the country’s budget, thus averting a ‘shutdown’ of the government – a condition that would paralyze all the country’s federal agencies.
Adding up the negative factors, the three main Wall Street indexes registered their worst month-end close of the year. The S&P 500 fell 1.19% – its worst month since March 2020 – while the Dow Jones fell 1.69% and the Nasdaq dropped 0.44%.
The dollar, which gained momentum worldwide with the uncertain scenario for the markets, rose 0.29% in Brazil, closing the Thursday session trading at R$5.44.
It is worth noting that the currency’s volatile performance yesterday was also influenced by the formation of the Ptax, the exchange rate calculated by the Central Bank and used as a benchmark for contracts involving dollar trades. The Ptax is calculated daily, but investors pay close attention to the Ptax of the last trading session of the month because it will be used for foreign exchange contracts in the following month.
STOCK MARKET HIGHLIGHTS
Vale’s (VALE3) shares rose more than 1% throughout the trading session, maintaining Ibovespa in the positive field. Shares closed the day up 0.58%, in line with the 4.47% rise in iron ore prices in China.
The strong appreciation occurred as Chinese steel mills increased their stocks of the commodity before the extended Golden Week holiday, which starts this Friday, October 1, on National Day. The date marks the anniversary of the foundation of the People’s Republic of China – and celebrations paralyze the country for a week.
The appreciation of ore boosted steel companies’ shares, with Gerdau (GGBR4), Metalúrgica Gerdau (GOAU4) and CSN (CSNA3), among the day’s top performers and up over 3%.