The factors that make Ibovespa soar this Wednesday (2) – Money Times

O Ibovespa fires this Wednesday amid to the increase made which took part of the market by surprise, Brazil's rating, which rose from Ba2 to Ba1.

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With this, the country is just one step away from the long-awaited investment grade, when it earns the seal of good payer in the international market.

At around 12:54 pm, the index had gained 1.20%, at 134,089 points.

According to analysts, the vote of confidence from Moodys it helps to flatten the interest rate curve, at least in the short term, which gives stocks a boost. Construction companies lead the gains.

According to the rating agency, the upgrade reflects material credit improvements that it expects to continue, including stronger growth performance than previously assessed and a growing track record of economic and fiscal reforms that lend resilience to the credit profile.

The news was widely celebrated in Ministry of Finance.

In Brasilia, Fernando Haddad he pointed out that the report is in line with what the ministry defends and said that, if the government continues “without letting its guard down” in relation to expenses and revenues, it will be possible to end the mandate with investment grade.

Bruno Komura, Potenza Investimentosalso remembers that an additional effect was the closing of the American interest curve due to uncertainties.

“The interest rate curve here in Brazil tends to follow suit abroad because we shouldn’t have any negative impacts from the war.”

Ibovespa: Commodities also help

Analyst Victor Benndorf, however, states that the commodities are the main reason for the stock market's rise this Wednesday. The market continues to reflect on the stimulus package from China.

“Oil holding US$71 and trying to pull back, works well with Petrobras (PETR4).

However, for him, the fundamentals for oil remain negative for the medium to long term.

The prices of oil advance this Wednesday (2) with the increase in tension in the Middle Eastafter the Iran fired missiles at Israel. Although part of the missiles were intercepted by the Israeli air defense system, there are reports of injuries from the shrapnel.

“For now, our vision consists of short-term improvements only; more lasting positive impacts must come from the fiscal sector (government regaining credibility again)”, he explains.