Ibovespa closes down by 1%; dollar goes to R$ 5.10, lowest since July

O dollar closed down 0.70%, this Monday (21), quoted at R$ 5,105, the lowest value since July 29 of last year (R$ 5,079).

The Brazilian currency showed the best global performance this Monday, benefiting from the continuous rotation of flows in favor of higher interest markets – in the case of Brazil -, in a movement apparently unshaken by the geopolitical crisis involving Russia, since, until the closing of currency negotiations, the scenario was one of reduction of tensions.

The Ibovespa, the main index of the Brazilian stock exchange, fell 1.02% this Monday, to 111,725.30 points, following the global reaction to renewed fears of a potential Russian invasion of Ukraine, after President Vladimir Putin recognized rebel regions. in the neighboring country.

Financial sector and Americanas shares, after retailer websites go offlinewere the highlights of the decline, while Petrobras was the main positive contribution of the index.

It is worth noting that this is a low liquidity session, as Wall Street exchanges are closed due to a holiday in the United States.

Here are the highlights of Monday’s trading session:

biggest highs

• 3R Petroleum (RRRP3) +3.87%;
• PetroRio (PRIO3) +3.65%;
• Sabesp (SBSP3) +3.54%;
• Petrobras (PETR3) +2.70%;
• Petrobras (PETR4) +2.58%

biggest casualties

• Qualicorp (QUAL3) -7.84%;
• Positive (POSI3) -6.79%;
• American (AMER3) -6.61%;
• Petz (PETZ3) -6.27%;
• Meliuz (CASH3) -6.23%

abroad

Over the course of the day, tensions surrounding Ukraine eased after US President Joe Biden agreed to hold a meeting with Russian counterpart Vladimir Putin on the topic.

However, near the close of US currency talks, Russian President Vladimir Putin acknowledged two breakaway areas of Ukraine, saying he would negotiate directly with Ukrainian rebels, adding to tensions in the region. The new scenario was not absorbed by the market in the final stretch of currency negotiations this Monday, but it should focus the attention of investors.

“The situation is extremely tense because the US cannot abandon the Ukrainians under penalty of weakening its influence over European territory once and for all. The increase in tension may favor the real via higher commodities, but other currencies are starting to gain strength such as the Swiss franc, which is the second most appreciated currency of the day next to the Brazilian currency. An eventual war will bring strong volatility and we suggest caution in purely expectations positions in the coming days”, evaluates André Perfeito, from Necton.

Scholarships in Europe

European shares tumbled to a four-month low on Monday, with auto and technology shares leading losses after Kremlin comments dashed hopes of a diplomatic solution to Europe’s biggest military crisis in decades.

The pan-European STOXX 600 index closed down 1.30% to 454.81 points, its lowest level since October, on headlines related to the conflict between Russia and Ukraine.

“These are very expressive drops and reiterate the fear that a war will break out at any moment in fact”, says Perfect,

Petroleum

In the case of oil, analysts at Goldman Sachs say that Brent oil prices should surpass $100 per barrel in this year. According to them, the oil market remains in a “surprisingly large deficit” as the effect of the Omicron variant of coronavirus in demand for the commodity is, so far, lower than expected. In addition, the Ukraine tensions drive prices upalready above US$ 90.

fed

Another factor that weighs on this movement is the expectation of interest rate hikes in U.S in March, by 0.25 or 0.5 percentage point, reinforced by inflation data slightly higher than expected. As a result, foreign investors have withdrawn from the US stock market.

With US inflation hitting a four-decade record, the Fed has been giving the markets tougher indications, but the minutes of the bank’s last meeting did not make clear the size and rhythm of the grip that the US central bank will make, indicating that decisions will take place at each meeting due to the economic context.

Any interest rate hike in the country may affect investments in Brazilas it makes US Treasury bonds even more attractive to investors, putting negative pressure on the real.

Brazil

On investors’ radar is also the call Fuels PEC, which would allow the suspension of taxes for these products. Representing a possible lack of expenditure control, the topic has the potential to negatively affect the real and the Ibovespa.

Two PECs have already been filed, one in the Senate and another in the Chamber, with calculations of loss of revenue ranging from R$ 18 billion to R$ 100 billion depending on the content, but the focus at the moment is two bills on the subject that can be voted on. this week.

One of the PLs determines a fixed ICMS charge for fuels, with the state tax no longer varying following product price fluctuations, and expands the so-called gas voucher for Brazilian families.

The other would create a fund to stabilize the price of oil and derivatives (diesel, gasoline and LPG), with a new policy of internal sales prices for distributors.

In the previous week, the dollar closed down by 1.93%, the sixth consecutive week in 2022. Ibovespa fell 0.6%.

*With information from Reuters