São Paulo stock exchange advances 0.83% for the week

RIO DE JANEIRO, BRAZIL – The São Paulo stock exchange rose 0.83% in the five sessions of a week marked by tensions in the political scenario, with the growing conflict between President Jair Bolsonaro and the Judiciary; and fiscal tensions due to the risk of an uncontrolled increase in public spending.

According to preliminary results at the end of the session, the Ibovespa, the benchmark index of the trading floor, rebounded this Friday by 0.97% and closed at 122,810 basis points.

The first week of August, full of ups and downs, was saved thanks to the strong rise on the last day, boosted by the good mood in the foreign market.

However, optimism in the São Paulo market is moderate due to the persistent doubts in the domestic scenario.

On the one hand, Bolsonaro is continuing the power struggle with the Supreme Court and the Superior Electoral Court, seeking to change the current electronic voting system to one with additional analog security by introducing a printed receipt.

On the other hand, economic agents are awaiting the government’s negotiations to create a new social assistance program with higher payments than the current ones, which, according to the market, could further unbalance public accounts.

This turbulence was felt in the foreign exchange market, where the US dollar appreciated today by 0.42% and closed at R$5.23 for purchase and sale at the Brazilian commercial exchange rate. In the five sessions of the week, the greenback gained 0.5% against the Brazilian currency.

The volume traded reached R$24.16 billion (about US$4.6 billion) in a total of 3,429,933 financial operations.

Leading the gains in the Ibovespa index were the ordinary shares of the state-owned electricity group Eletrobras (4.09%) and the shares of the Brazilian subsidiary of the Spanish Banco Santander (3.97%).

The ordinary shares of reinsurance company IRB Brasil (3.19%) and aircraft manufacturer Embraer (3.28%) also advanced.

On the other side of the coin, the biggest losses were recorded by retail network Lojas Americanas (-2.41 %), paper mill Klabin (-1.05 %), and Fleury Laboratories (-0.95 %).

The most-traded securities were the common shares of the mining giant Vale (0.57%) and the preferred shares of the state-owned Petrobras (0.14%).