Ibovespa accelerated losses and renewed session lows on Monday afternoon amid concerns over the new fiscal framework expected for the country, taking off from improvement seen in other equity markets overseas following the UBS/Credit Suisse deal and coordination of central bank action.
At 15:07, Ibovespa was down 1.09% to 100,871.03 points. At its worst, it reached 100,678.84 points, the lowest intraday since July 2022. Previously, it reached its highest 102,328.44 points. The financial volume amounted to 12.3 billion reais.
The statements by President Luiz Inácio Lula da Silva, who underlined once again that investments and social advances cannot be seen as expenses and supported the use of public banks to offer credit and finance the country’s development, led discomfort during tax rule discussions.
At the same time, the names of the PT have once again put pressure on Finance Minister Fernando Haddad, publicly and behind the scenes, demanding a flexible text, which also includes a dose of fiscal expansionism to stimulate economic growth.
Haddad said earlier Monday that Lula had instructed cabinet members to hold meetings with House and Senate presidents, party leaders and non-market economists ahead of the official unveiling of the fiscal framework.
Even so, the minister said he hoped the text would be presented this week, before the president and ministers travel to China – Lula departs on the 24th.
In the market, fears are related to the risks of the prevailing political wing, as well as a potential delay in the definition of the new fiscal peg, which, according to Vice President Geraldo Alckmin, will be based on the debt curve, the surplus and spending control.
Abroad, Wall Street had a strong session, with the regulator-backed UBS takeover of Credit Suisse and coordinated central bank action bringing some relief, as agents speculated on the decision of the Federal Reserve this week, mainly on the possibility of suspending high interest.
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Source: Terra
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