Brazil’s Ibovespa drop 1.04% in the week

On Thursday (6), the Ibovespa fell 0.15% and closed at 100,821.73 points, with a total financial volume of R$16.8 billion.

The index fell 1.04% at the end of the trading week due to the Easter holiday.

This morning, Brazilian Finance Minister Haddad said that the fall in interest rates would result from the new fiscal framework and tax reform that the government hopes to approve in Congress.

He said that the “jabuti” taxes [“jabuti” is the name given to items included in a provisional measure that go beyond the original subject of the proposal] that have been created over the years had sucked the budget of the Brazilian State.

The statements come when investors wait for potential measures to increase government revenues, a key piece to the proposed tax framework.

HIGHLIGHTS OF THE DAY

Leading the downturn, Natura and Totvs fell, respectively, 5.49% at R$11.20 and 4.09% at R$27.24.

About Natura, says Rodrigo Azevedo from GT Capital:

“Once more among the main falls of the index, reflecting the announcement of the sale of Aesop.”

“Even if this operation represents a positive change for the company, the market fears that by selling one of its best assets, it may have difficulty maintaining earnings in the coming years.”

On the positive side, Alpargatas rose 5.04% to R$7.50, Lojas Renner advanced 4.94% to R$15.71, and 3R Petroleum rose 4.84% to R$29.02.

The oil company’s shares rose after analysts assessed the company’s new certification of oil and gas reserves as less negative than expected, also releasing investment projections of US$6.1 per barrel to develop proven and probable reserves against US$5.9 a year earlier.

ABROAD

Wall Street’s main indexes operated without a definite direction in the United States after releasing the stronger-than-expected weekly unemployment claims report.

This signals that the interest rate increases by the Fed (Federal Reserve) are slowing down the economy.

According to Azevedo:

“The market is also waiting for the payroll data to come out tomorrow.”

“Despite fears concerning a possible recession in the US, Fed members remain firm in raising interest rates by at least another 0.25% percentage point at the next meeting”.

In Europe, equity markets rose ahead of the extended Easter weekend as real estate and travel stocks helped to overcome concerns about the US economic slowdown triggered by weak economic data.

Markets still expect the European Central Bank (ECB) to continue raising interest rates at the next monetary policy meeting.

In Asia, China stocks closed largely unchanged as investors assessed further evidence of economic recovery in the face of rising China-US tensions, while chipmakers continued to rise.

Hong Kong stocks rose, led by the healthcare and raw materials sectors.

With information from Reuters