CSN shares soar almost 10% with strong appreciation of iron ore, after new economic stimulus package in China (Image: CSN/Disclosure)
After falling more than 35% since January, shares of CSN (CSNA3) have a brief respite this Tuesday (29).
The company's shares have led the Ibovespa's gains since the beginning of the session and are up almost 10%. At around 1:15 pm (Brasília time), CSNA3 was up 9.30%, at R$12.11. Follow in Real Time.
The shares are also among the most traded on B3, with around 10.4 thousand trades.
And the reason for the strong appreciation of shares is the same as for the annual drop: the performance of iron ore.
Today (24), commodity futures prices recorded the biggest daily gain in over a year, with an improvement in market sentiment due to a package of new monetary stimulus from China and the replenishment of stocks ahead of Chinese holidays.
The most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) ended trading for the day up 4.64% at 699.5 yuan (about $99.38) a tonne – the biggest daily rise since May 29, 2023.
A little help from China
China's central bank (PBoC) has launched the biggest stimulus package since the pandemic to pull the economy out of its deflationary state and back to meeting the government's growth target.
Focusing on the real estate market, the Central Bank reduced average interest rates for existing mortgages by 50 basis points and cut the minimum down payment requirement to 15% for all types of housing, among other measures.
The Chinese central bank also introduced two new tools to boost the capital market.
The first is a program of swap with an initial size of 500 billion yuan, which allows funds, insurers and brokerages to have easier access to financing to buy shares.
The second measure offers up to 300 billion yuan in “cheap” loans from the central bank to commercial banks to help them finance purchases and buybacks of shares from other entities.
The broader-than-expected package, which offers more financing and rate cuts, marks Beijing's latest attempt to restore confidence after a string of disappointing data raised concerns about a prolonged structural slowdown.
The day before, China's central bank cut interest rates for a 14-day period — starting on Monday (23) —, which was considered a small sign of the announcement of new monetary stimulus.
In addition, Chinese financial information website Hexun Futures reported that iron ore output in the January-August period rose 4.1 percent year-on-year, citing data from the National Bureau of Statistics.
The world's second-largest economy is experiencing slower growth despite a raft of policies aimed at stimulating consumption.
Increase in the sector as a whole
CSN (CSNA3) leads the rise in the mining and steel sector.
But Usiminas (USIM5) is also among the biggest gainers on the Ibovespa, supported by iron ore and in a recovery movement from recent losses.
The day before, the company's shares ended the session as the second biggest loser on the Ibovespa, down almost 5%, after JP Morgan downgraded the shares twice from buy to sell.
Today, USIM5 is up around 6%.
Furthermore, Vale (VALE3) is also one of the highlights — and supports the advance of more than 1% of the main index of the Brazilian stock exchange. At around 1 pm, the shares rose 5.48%, to R$ 60.68.
The gains began even before trading opened. Vale's shareholders' notes (ADRS), traded under the ticker VALE, soared more than 5% in premarket trading in New York.
During the North American trading session, the shares continued to rise.
*With information from Reuters