The Ibovespa index saw a 0.75% decrease to 126,123 points on Monday, influenced by declines in Petrobras (PETR4) and Vale (VALE3).
Petrobras’ decision not to pay anticipated extraordinary dividends sparked market discontent, shifting focus towards future energy transition investments.
This move raised concerns about potential unproductive investments, recalling past government oversights with projects like the Pasadena and Abreu Lima refineries.
Petrobras shares briefly surged on rumors of dividend stance reconsideration, amid Finance Minister Fernando Haddad’s emphasis on dividends’ importance.
Lula criticized Petrobras’ dividend plan, urging increased investments and dismissing market criticism as greed.
Stock market expert Raony Rosseti highlighted the financial market’s sensitivity to political actions affecting Petrobras‘ dividend policies.
Reversing dividend withholding could ease investor concerns over political influence, amidst market volatility under Lula’s administration.
Both Petrobras’ common and preferred shares fell, down 1.92% and 1.30%, respectively.
Additionally, declines in Vale and other mining and steel sector stocks further pressured the Ibovespa, notably due to a sharp drop in iron ore prices.
Dalian iron ore dropped 5.41% to 831 yuan ($115.68), hitting a four-month low due to supply surplus and weak demand.
Vale’s ordinary shares dropped 3.11%, with Usiminas’ preferred series A shares (USIM5) and CSN Mineração’s ordinary shares (CMIN3) also experiencing significant losses.
Despite these local challenges, the Ibovespa’s performance was only slightly impacted by global markets.
Dow Jones edged up; S&P 500 and Nasdaq declined in the US as investors awaited crucial economic data.
The Brazilian real remained nearly unchanged against the dollar, marginally falling by 0.06% to close at R$ 4.978.