Ibovespa falls to 131,000 points with commodities and a weaker Wall Street, on options expiration day (Image: Pixabay)
O Ibovespa (IBOV) extended losses from the previous session, driven by commodities and a 'weaker' Wall Street, on options expiration day.
This Thursday (19), the main index of the Brazilian stock exchange closed at down 1.55% to 131,065.44 points. Over the week, the index accumulated a drop of 1.84%.
Already the dollar in sight (USBRL) ended the session R$ 5,5209 (+1.78%). In the last five trading sessions, the US currency fell 0.83%.
On the domestic front, investors were waiting for the release of the Bimonthly Primary Revenue and Expenditure Report for the 4th quarter. The press conference will take place on Monday (23).
In the view of strategists of the BTG Pactualafter a good recovery in recent months, investors have become more skeptical about the continued appreciation of the Ibovespa, which rose 1.48% in June, 3.02% in July and 6.54% in August.
“Although interest rates have been cut in the US…, local investors are concerned about the fiscal situation – the budget proposal for 2025 seems unrealistic – and unsure about how the monetary tightening cycle in Brazil could affect local stocks,” said Carlos Sequeira and team.
Stock market ups and downs
Among the assets traded on the stock exchange, AgroGalaxy (AGXY3) shares led B3's losses for the third consecutive day, still in reaction to the request for judicial recovery last Wednesday (18). On the same day, the company's president and five other board members resigned from their positions. Since then, the shares have accumulated a drop of more than 50%.
Already in Ibovespa, Embraer (EMBR3) led the gains supported by the appreciation of the dollar against the real. In general terms, the rise in the US currency benefits companies with an export profile — since revenues, or part of them, are quoted in dollars.
Tim (TIMS3) was also among the biggest gains on the main index of the Brazilian stock exchange after Scotiabank raised its recommendation from neutral to buy on the shares. In the positive review, the Canadian bank increased the target price from R$17.50 to R$24.80 — which represents a potential appreciation of 34% in relation to the closing price last Thursday (19).
Petrobras (PETR4;PETR3) closed slightly higher, going against the trend of oil.
On the negative side, cyclical stocks continued to be among the biggest falls, amid position adjustments and sectoral changes with the 'mini-cycle' of interest rate hikes on the radar.
Mining and steel companies also featured in the losses. Among them, shares of Vale (ELECTION 3) fell by more than 1%.
Iron ore futures prices rose on Friday (20) but posted a weekly loss as investors weighed the prospects of fresh monetary stimulus from China against a weak local economic recovery.
The most-traded January iron ore contract on China's Dalian Commodity Exchange (DCE) ended trading 0.15 percent higher at 680 yuan ($96.43) a tonne. The contract fell 3.41 percent for the week.
Exterior
Nos USAthe momentum of the Federal Reserve's rate cut began to dissipate and Wall Street operated without strength this Friday (20), after renewing records the day before.
Yesterday (19), the Dow Jones Industrial Index hit a record above 42,000 and the S&P 500 rose above 5,700 for the first time.
Today, Federal Reserve (Fed) Director Christopher Waller advocated cutting the US interest rate by half a percentage point this week. Last Wednesday (18), the Fed reduced the rate to the range of 4.75% to 5.00% per year.
Waller said inflation is falling even faster than he expected.
Citing recent data on consumer prices (CPI) and producer prices (PPI), Waller told CNBC that the data is showing that core inflation, excluding food and energy, as measured by the Fed's preferred measure, has been below 1.8% for the past four months. The Fed targets annual inflation at 2%.
He also said he is “comfortable” with the aggressive pace of cuts, “if the data demands it.”
Check out the closing of the New York indexes:
- S&P 500: -0.19%, at 5,702.55 points;
- Dow Jones: +0.09%, at 42,063.36 points;
- Nasdaq: -0.36%, at 17,948.32 points.
The S&P 500 rose 1.3% this week — its fifth consecutive week of gains. The Dow Jones and Nasdaq both rose 1.5% over the last five trading sessions.
In addition, the Bank of Japan (BOJ) kept interest rates steady. The central bank governor signaled that there is no rush to further increase borrowing costs. The country's stock market closed up more than 1.5%.
*With information from Reuters