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Stock market ends in fall in Lula’s 1st week; compare with Bolsonaro, Temer, Dilma and FHC governments

In this first week of Luiz Inácio Lula da Silva’s (PT) government, the Ibovespa, despite ending this Friday at an increase of 1.23%, and also positive in previous sessions, registers 0.73% of accumulated losses in the period , pressured by the strong declines of the first two sessions of the year.

This is the worst result since the first week of Lula’s second term, which began in 2007, when the index fell by 3.70%, according to a survey by TradMap. And the second worst since the first week of the first term of Fernando Henrique Cardoso (PSDB), in 1994, when it plummeted 12.09%.

The index was also negative at the beginning of FHC’s second term, in 1998, when it recorded -0.04%, and at the beginning of the second term of Dilma Rousseff (PT), which registered an accumulated decrease of 0.13%.

In her first term, Dilma’s first week had a positive balance of 1.09% on the index. And in the first five trading sessions of the government of Michel Temer (MDB), the increase in the index was 4.02%, and in the government of Jair Bolsonaro (PL) it was 4.72%.

The dollar had the biggest daily percentage devaluation since October 31 (-2.57%) and the lowest closing level since December 26 (R$ 5.21) this Friday (6), when it ended with a strong down 2.17%, quoted at R$5.236 on sale after US employment data largely in line with the expected and conciliatory tone of President Luiz Inácio Lula da Silva at his first ministerial meeting, which led the US currency to American to completely reverse the gains accumulated in the first week of the new government.

In the accumulated result for the week, the US currency depreciated by 0.79%.

In the futures interest market, all maturities recorded a drop in premiums, with maturities from 2025 onwards below 13%.

5 days

On Monday (2), the index ended at a low of 3%. In this session, Petrobras’ common and preferred shares fell by more than 6%, after speeches by the newly sworn-in president about a retreat in privatizations, including Petrobras. Petrobras ON (PETR3) and Petrobras PN (PETR4) ended the day with losses of 6.67% and 6.45%, respectively.

On that day, the five main state-owned companies listed on B3 lost, together, R$ 31.806 billion in market value. The list was calculated by the TradeMap investment platform and includes Petrobras, Banco do Brasil, Eletrobras, Caixa Seguridade and BB Seguridade. Their total market value fell from BRL 634.6 billion in the last trading session of 2022, on Friday (30), to BRL 602.8 billion.

Largest of them, Petrobras accounts for more than half of this amount. It alone lost BRL 22.8 billion this Monday, from BRL 345.8 billion to BRL 323.2 billion, after its shares closed the day down 6.45%.

On Tuesday (3), losses were 2.08%, with banks and Petrobras among the biggest negative pressures, in another day marked by fears with the policies signaled by the new government.

On Wednesday (4), the Ibovespa closed up 1.12%, in a truce after a more negative start to the year, with Petrobras among the main supporters after Senator Jean Paul Prates, appointed by the Union to chair the company, state that it will not unlink fuel prices from international values.

On Thursday, in the midst of adjustments supported by the more appeasing tone of recent speeches by the new government, the index rose again, and closed at a high of 2.19%, with Petrobras shares advancing more than 3% and accounting for relevant support on the day.

And this Friday (6), the Ibovespa closed at an increase of 1.23%, with the truce in the political noises opening space for the Brazilian market to follow the positive performance of Wall Street after employment data.

According to the analyst of CNN Fernando Nakagawa, the possibility of a more cohesive government in its speech and economic attitudes, gave impetus to business in this last trading session of the week.

“After the scare of the first days of the new government, the ministerial meeting at the Planalto Palace seemed to assuage investors’ doubts and concerns a little”, he assesses.


If we consider the period since October 30, when Lula was elected president, companies listed on B3 lost R$546.2 billion in market value.

The accounts take into account the sum of all more than 400 publicly traded companies on B3 and was calculated by the TradeMap investment platform at the request of CNN .

The value of the drop is equivalent to 3.8 times the value of the PEC of the Explosion: the proposed amendment to the Constitution presented by Lula before taking office and approved by Congress in December released an extra budget of R$ 145 billion so that the new government could spend on Bolsa Família and other social programs in 2023.

*With information from Reuters, Fernando Nakagawa, Juliana Elias and Diego Mendes

Source: CNN Brasil

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