RIO – The Ibovespa index, the main stock index, fell 3.39%, to 102,224 points on Friday, following the general decline in global markets due to The emergence of a new type of Covid-19. Airlines suffered the biggest losses in a trading session in which only two stocks were in the negative territory.
It was the worst index since November 22 when the Ibovespa index closed at its lowest level for the year at 10,2122 points.
Per week, Ibovespa accumulates 0.65%. In the month, devaluation of 1.1%. And in the year, a decrease of 13.99%.
The dollar, in turn, rose by 0.54%, and is trading at 5.5948 Brazilian riyals, after reaching a maximum of 5.6679 Brazilian riyals at the opening. and bitcoin decreased 20% Compared to the record at the beginning of the month.
The cumulative currency fell 0.23% in the week, 0.93% in the month, and an increase of 7.84% on the year.
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The stock market held surprisingly on Friday. It’s a little higher than yesterday, but nothing significant. Probably because the coin has already picked up a lot. But the stock exchange was hit hard, because besides everything heavy in commodities – explains economist Alexander Schwarzman, former director of the Central Bank.
Investor behavior was similar to what was seen at the beginning of the pandemic, in March last year. They stay away from riskier assets like stocks and look for safer positions like bonds and currencies of stronger economies.
– There are fears that it will have consequences similar to those we have seen in recent years, with an impact on commodities and airlines in general. We are especially seeing the trend towards quality, with investors exiting riskier markets – Schwarzman notes.
The fear is that a new wave of Covid will halt the global economic recovery. The new species, nicknamed Ômicron, is spreading rapidly throughout southern Africa, and has also been detected in Botswana, Hong Kong and Israel.
World Health Organization class The new variable as a ‘variable of anxiety’ (VOC).
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Adjusting future interest rates downward. In addition to the new Covid-19 variable, prices continued to be affected by the statements of the President of the Central Bank, Roberto Campos Neto, about the monetary authority’s endeavor to contain inflation, but in an orderly manner.
The rate of interbank deposit contracts for January 2023 decreased from 12.145% in the previous adjustment to 11.84% and the direct investment rate for January 2024 decreased from 11.97% to 11.795%.
The January 2025 contract fell from 11.86% to 11.73% and the DI contract for January 2027 fell to 11.71% compared to 11.81% in the previous reading.
feeling frustrated
For Arena Investimentos fund manager Maurício Pedrosa, it was frustration that weighed most on the market day.
This is because the news of the new variable is in line with the prospects for economic recovery in most different sectors of the economy, especially those that are most sensitive to health restrictions, such as retail, airlines and shopping malls.
– We were on the way to saying goodbye from this unique problem which was Covid-19. Today, in a few days, this event may turn out to be not that serious. But there is a concern that in the coming years we will have to deal with recurring epidemics.
Along the same lines, Ovil’s investment advisor, Jose Manica.
– We live in a scenario of extreme uncertainty. Since we’ve learned to live with the pandemic problem, this news of the new variant has been the most impactful. It takes us back to the first moment of the lockdown and scares investors, Mânica said, noting that news about new restrictive measures in European countries was already rattling global markets in recent trading sessions.
The losses are already known
Rodrigo Franchini, partner of Monte Bravo Investimentos, stresses that it is natural for investors to seek greater protection, because they already know the effects that the new restrictive measures, which were not clear at the beginning of the epidemic, in March last year.
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It must also be taken into account that global economies have not recovered from the damage caused by the epidemic, with continued bottlenecks in production chains, which led to high freight prices and created a mismatch in supply and demand for various commodities.
– Even if you still do not know the details of the new variable, the investor prefers not to be exposed to this event. The market already knows what the pandemic means and the dimensions of its impact on economic sectors. Because he already knows this danger, he puts it to the test. And those who suffer the most are emerging markets, where they always have a high risk potential.
Americans drop more than 2%. In Paris, the drop was close to 5%.
In the US market, which has reduced hours due to the Thanksgiving holiday, the Dow Jones Index is down 2.53% and the S&P is down by 2.27%. The Nasdaq fell 2.23 percent.
The Dow Jones index posted its worst daily performance since October 2020.
In Asia and Europe, major arenas also recorded a decline.
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The London Stock Exchange was down 3.64% and Frankfurt was down 4.15%. In Paris, there was a decrease of 4.75%.
The FTSEurofirst 300 Index fell 3.71% to 1,796 points. The pan-European STOXX 600 index lost 3.67 percent to 464 points, its worst session since June 2020.
In Asia, where markets are already closed, the Nikkei on the Tokyo Stock Exchange is down 2.53%. In Hong Kong, there was a decrease of 2.57% and in China there was a decrease of 0.56%.
The variable adds to the internal problems
Pedrosa stresses that the problem of Covid-19 is adding to our already volatile financial scenario, with the impasse of the proposed amendment to the Constitution (PEC) in Precario, being poorly assessed by the market.
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According to the manager, it is possible to start repricing market assets in the context of a more attractive fixed income.
For him, the event may raise doubts among market members about the start of the withdrawal of economic stimulus by the central banks of advanced economies, especially the US. The infusion of funds by these institutions was carried out precisely with the aim of reducing the negative effects of Covid-19.
– If they understand that this event is appropriate and it makes sense to incorporate it into the models, they can start calculating the withdrawal of stimulus at a slower pace – Pedrosa said regarding the position of the Federal Reserve, the US central bank, which expected the withdrawal to start later this month.
Along the same lines, Franchini follows:
– I wouldn’t be surprised if the new alternative is really problematic, the Fed has changed its monetary policy publicly.
Fall of Vale and Petrobras
Among the actions, only two were not closed in the negative field. Susanoo’s common stock (SUZB3, with voting rights) rose 0.15% and Taesa Units (TAEE11) rose 0.11%.
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The common stock of Vale (VALE3) and Siderúrgica Nacional (CSNA3) yielded 2.64% and 4.91%, respectively.
Iron ore prices again lost their momentum on Friday, returning most of the gains accumulated in the week. The commodity ended the day down 5.6% in the port of Qingdao, China, to $96.67 per ton.
Usiminas preferred stock (USIM5) is down 6.58%.
In the financial sector, blue chips Itaú (ITUB4) and Bradesco (BBDC4) gained 1.89% and 4%, respectively.
Petrobras’ common stock (PETR3, with voting rights) fell 4.36% and preferred stock (PETR4, without voting rights) 3.88%
Oil is in its worst session since April 2020
Investors’ fear that countries will shut down again to protect themselves from the new pressure, reducing the growth rate of their economies, has also affected oil prices.
Both contracts represent the fifth week of losses and They recorded their biggest losses In absolute numbers since April 2020, when WTI, for the first and only time, turned negative.
The price of a barrel of Brent crude, a reference in the international market, fell by 11.5% at $72.72. The price of a barrel of US light sweet oil (WTI) fell 13% to $68.15.
The less the economy grows, the lower the consumption of the good, which leads to lower prices.
Airlines crash
As was the case abroad, businesses associated with economic recovery and tourism were among the worst losses.
Preferred shares of Gol (GOLL4) and Azul (AZUL4) gained 11.81% and 14.18%, respectively. Embraer’s common stock (EMBR3) was down 8.41%.
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The UK government has already suspended flights from six African countries due to the spread of the virus on the continent.
– Covid-19 has a significant impact on commodity prices and our stock exchange is heavily affected by the price of these commodities. Theses retail, shopping malls and airlines suffer a lot – Pedrosa highlights.
Among the retailers, ON shares in Magazine Luiza (MGLU3) fell 7.36% and Via (VIIA3) shares fell 4.54%. ON assets of Americanas sa (AMER3) decreased by 6.22% and PN (LAME4) by 4.48%.
Mall officials also suffered heavy losses. The common stock of BRMalls (BRML3), Iguatemi (IGTI3) and Multiplan were converted to 5.18%, 3.29% and 5.07%, respectively.
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