The Ibovespa extended the previous day's losses, driven by the performance of Petrobras shares and caution in NY after the US interest rate cut (Image: REUTERS/Amanda Perobelli)
A ‘Super Wednesday' finally arrived and confirmed part of the market's expectations. While investors await the decision on the Selic rate, the Ibovespa (IBOV) followed the pace abroad – which reacted to the 0.50 percentage point (pp) cut in US interest rates.
This Wednesday (18), the main index of the Brazilian stock exchange closed at down 0.90% to 133,747.69 points.
Already the dollar in sight (USBRL) ended the session R$ 5,4617 (-0,48%).
On the domestic front, investors reacted to corporate news. In particular, Agrogalaxy (AGXY3) filed for bankruptcy protection late in the afternoon. Earlier, the company's CEO and five other board members resigned from their positions.
Today, the Central Bank's Monetary Policy Committee (Copom) will release another monetary policy decision. The market expects a 0.25 pp increase in the Selic rate, which would take interest rates to 10.75% per year. Bets on a 0.50 pp increase are not ruled out.
Ibovespa highs and lows
The positive end of the Ibovespa was led by Braskem (BRKM5). Shares jumped 9% in the first hour of trading and closed up more than 5% after UBS BB raised its recommendation from neutral to buy.
The bank also revised its target price upwards, from R$22 to R$28 – which represents a potential appreciation of 48.2% compared to the closing price last Tuesday (17).
On the negative side, Azul (AZUL4) interrupted its sequence of consecutive gains, realizing recent gains. The airline's shares rose more than 50% in the last three trading sessions.
The company's market value rose to R$2.16 billion at the close of trading on September 17, an increase of R$761 million compared to the value recorded on September 12, according to a survey by Elos Ayta.
Between aces blue chips, Petrobras (PETR4; PETR3) fell more than 2% amid rumors about new adjustments in fuel prices. However, the state-owned company stated that the information “is not true”.
“Any adjustments to the prices of its products are made in the normal course of its business without a defined frequency and, when there is a decision to make a change, the price list is immediately disclosed to its customers through corporate channels,” it said in a statement.
Vale's shares (ELECTION 3) had another day of decline. The company followed the performance of iron ore in China. When trading resumed after the holiday, the most traded contract for the commodity on the Dalian Commodity Exchange futures market closed down 4.12%, at US$ 95.15.
Exterior
Nos USA, Wall Street experienced a rollercoaster ride this Wednesday, with the Federal Reserve's monetary policy decision in the spotlight.
The Federal Reserve (Fed) cut interest rates to 4.75% to 5.00%. The magnitude of the reduction was in line with market expectations, according to CME Group's FedWatch tool.
Furthermore, this was the first reduction since March 2020 and marks the beginning of the monetary easing cycle in the US.
Along with the decision announcement, the BC released the points chart (“dot plot“), updated quarterly. In it, nine directors see the interest rate at 4.40% by the end of 2024 – which opens a window for two 0.25 pp cuts in the next FOMC meetings.
That is, the Fed must bring the interest rate (Fed Funds) in the range of 4.25% to 4.50% by the end of the year, higher than they predicted in June, as inflation approaches the 2% target and unemployment rises.
During the press conference, the president of the US Central Bank, Jerome Powell, said that the projections for the trajectory of the cut in the basic interest rate do not imply an urgent process.
He added that it is not yet time to say that price pressures have definitively eased.
The interest rate cut was initially celebrated by traders. The Nasdaq index, for example, jumped more than 1% moments after the Fed's decision.
However, stocks gave back gains as concerns grew that the US Federal Reserve was trying to get ahead of potential economic weakness.
Check out the closing of the New York indexes:
- S&P 500: -0.29%, at 5,618.26 points;
- Dow Jones: -0.25%, at 41,503.10 points;
- Nasdaq: -0.31%, at 17,573.30 points.