IBOVESPA Rising as Investors Look for Opportunities Following Slump

SÃO PAULO, BRAZIL – The IBOVESPA index rose in the first few deals on Monday, March 30th, following the US futures indices and with investors looking for stocks deemed cheap. At 3:12 PM, the main index of the Brazilian stock market was up 0.87 percent and registered 74,070 points.

Despite the positive trend, the market is still attentive to the impacts of the coronavirus on the economy. Over the weekend, President Donald Trump extended the quarantine period in the US until late April. Earlier, Trump said that business activity would return to normal after Easter. The S&P 500 and Nasdaq indexes were up around two percent.

“Under normal conditions, the extension of the quarantine period would have pushed the market down,” said Rafael Bevilacqua, chief strategist of Levante Investments. In his opinion, the upward shift is associated with the correction of the latest losses. “They were pricing a war-like recession.” The IBOVESPA dropped by 45 percent in relation to this year’s maximum mark.

According to Jason Vieira, Chief Economist of Infinity Asset, the extended measures to contain the advance of the coronavirus may have been deemed more positive. “It’s a combination until it reaches the balance point,” he said.

Although the stock markets have shown some signs of rebound, Vieira still perceives a scenario of many uncertainties and high volatility. “Anyone who wants to capitalize on this wave must be very vigilant. This is all permeated by a coronavirus scenario and it could turn extremely fast,” he said.

Eletrobras’ shares skyrocketed 13 percent on the stock market after the company recorded a net profit of R$10.74 billion. Klabin’s shares also soared after the company announced the purchase of International Paper’s packaging plant. Klabin rose ten percent on the stock market and Suzano climbed 5.2 percent, also benefiting from the bullish dollar.

Gol and Azul’s shares, which have depreciated sharply since the coronavirus emerged, experienced another bullish session, up more than three percent.

Among the major assets on the IBOVESPA, Vale’s shares rose by 3.2 percent. At the other end, Petrobras’ shares dropped by around one percent, driven by the depreciation of the crude oil barrel prices in the international market.