Ibovespa closed higher on Friday, clearing 113k at its best time, the likes of which it hasn’t happened in four months, in an external climate favorable to risk assets, with expectations that the Federal Reserve could experience a break in the cycle of rate hikes in the United States.
Reference index of the Brazilian stock market, the Ibovespa rose by 1.8%, to 112,558.15 points, reaching a maximum of 113,069.55 points: the index had not exceeded the level of 113,000 points since the beginning of February. The financial volume was 28.7 billion reais.
With the increase in this session, Ibovespa achieved a weekly gain of 1.49%, completing six weeks without accumulating a negative performance, the longest streak since the seven-week rally from November 2 to December 18, 2020 .
In the US, job creation in May beat economists’ expectations, but wage moderation boosted bets on the US central bank holding interest rates at its June 13-14 meeting. It would be the first decision to keep interest rates unchanged for over a year.
Another component of relief was the US Senate’s approval Thursday of a bill that raises the debt ceiling to $31.4 trillion for the government, avoiding what would have been the first default in history, with consequences catastrophic global.
“The agreement to raise the US public debt ceiling eliminates one of the main short-term risks for the markets, and the banking crisis appears to have entered a less turbulent phase,” said the Bradesco Department of Economics team led by Fernando Honorate.
In a report to clients, they stressed that as tail risks abate, markets’ attention should return to issues such as the persistence of inflation, the resilience of the US economy and what that means for policy next steps monetary.
“Judging by the signals from the Fed and the evolution of the scenario, interest rate cuts in the United States still in 2023 seem unlikely”.
The favorable climate in the negotiating sessions was also supported by expectations of further economic stimulus in China. According to a report by Bloomberg, Beijing is working on new measures to support the real estate market.
In the case of Brazil, the behavior of the markets is mainly against the backdrop of recent signs of declining inflation and the advancement of the new fiscal rule in the national Congress, which have fueled expectations that the start of the Selic cuts could be anticipated by the Central Bank.
The technical position of the assets, according to market professionals, also corroborated the buying movement.
HIGHLIGHTS
– COSAN ON closed up 7.9%, to 16.53 reais, the best performance on Ibovespa, with BTG Pactual analysts reinforcing a “buy” recommendation for the shares, arguing that the company is close to a “turning point”.
– VALE ON advanced 4.27% to 67.94 reais amid a fresh rally in China’s iron ore futures, with the mining and steel sector as a whole finishing in the positive column.
– PETROBRAS PN appreciated by 0.82%, to 27.18 reais, favored by the increase in the price of oil abroad, with a barrel of Brent which closed with an increase of 2.5%, to 76, 13 dollars.
– ITAÚ UNIBANCO PN gained 1.46%, to 27.09 reais, while BRADESCO PN gained 1.75%, to 16.04 reais, benefiting from the greater propensity for risky assets.
– VIA ON fell 10.36% to 2.25 reais after JPMorgan downgraded its equity recommendation to “underweight”. Bank analysts also downgraded Magazine Luiza’s recommendation. MAGAZINE LUIZA ON loses 4.68%.
– TOTVS ON fell by 4.19%, to 28.83 reais, among the few falls of the Ibovespa during the day. UBS BB analysts reduced the equity recommendation to “neutral” and lowered the price target from 36 reais to 34 reais.
– CVC BRASIL ON closed down 0.83%, at 3.6 reais, reversing gains from the day’s first leg. Ahead of the opening, he said he is studying a stock offering and talking to potential investors.
– MÉLIUZ ON advanced by 2.67%, to 9.24 reais, after announcing this Friday that it had signed the day before the definitive agreement for the sale of fintech Bankly to the BV bank for 210 million reais.
Source: Terra
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