Ibovespa closed lower on Thursday, with blue chips Petrobras and Itaú Unibanco among the biggest negative pressures, while Vale shares counterbalanced, gaining about 1% on the back of a rally in iron ore prices.
The benchmark index of the Brazilian stock exchange, Ibovespa, lost 0.48%, to 134,029.43 points, after having registered a maximum of 134,776.87 points and a minimum of 133,591.04 points. The financial volume amounts to 16.7 billion reais.
According to analyst Alex Carvalho, CM Capital, Ibovespa, the broad negative correction of banks and the decline in Petrobras shares have separated the Sao Paulo Stock Exchange from the more positive movement of stock markets in the United States and Europe, although the rise of Vale has minimized Ibovespa’s losses.
On Wall Street, the S&P 500 closed up 0.75%, while the European STOXX 600 index rose 0.80%, after the European Central Bank (ECB) confirmed expectations and cut interest rates in the euro zone again.
The decline in stocks in more cyclical and interest-rate sensitive sectors also drew attention, with XP equity strategist Jennie Li seeing the move as a reflection of the DI curve, which in turn tracked the movement of Treasuries and Treasuries. continues to adjust to expectations for Selic.
Li drew attention to Brazilian retail sales data, released early Thursday, which returned to growth in July, rising 0.6% from the previous month, after falling 0.9% in June. The forecast was for a 0.5% increase.
“The data in Brazil continue to show that the economy remains strong, resilient… This significantly strengthens the scenario that… the next step of the Copom will probably be an increase in the Selic rate,” he said, referring to the Central Bank’s Monetary Policy Committee (Copom).
DI contracts at the end of the day were predicting a nearly 90% probability of a 0.25 percentage point increase in Selic next Wednesday, when Copom will conclude its two-day meeting and announce its decision later in the day.
This Thursday, Itaú economists revised the scenario, starting to expect a cycle of rate hikes of 1.50 percentage points starting on the 18th, “in a context of exchange rates under pressure, unanchored inflation expectations and some revisions – still small – of the GDP gap”.
The team led by former BC director Mario Mesquita estimates the Selic at 11.75% at the end of 2024, with a further increase in January 2025, reaching the terminal level of 12%.
For XP’s Li, the move in the Sao Paulo stock exchange also reflects some caution about next week’s events, especially the interest rate decisions by the Brazilian central bank and the Federal Reserve, both on Wednesday. “The market is waiting to see what happens next week,” he said.
HIGHLIGHTS
– PETROBRAS PN fell 1.13%, despite rising oil prices abroad. Citing the recent decline in the commodity, Goldman Sachs revised its projection of the state-owned company’s potential extraordinary dividend to $6 billion, $4 billion by the end of 2024 and $2 billion in the first half of 2025. The bank’s analysts also cut their target price for ON and PN shares by 10%, to 43.40 and 39.40 reais, respectively.
– ITAÚ UNIBANCO PN fell 1.1%, in a negative day for the sector, with BANCO DO BRASIL ON closing down 1.13%, BRADESCO PN down 0.45% and SANTANDER BRASIL UNIT closing down 0.97%.
– VALE ON rose 0.9%, helped by a rally in iron ore futures in Asia, as traders also analyzed recent news from the mining company. CSN MINERAÇÃO ON rose 3.27%.
– BRAVA ENERGIA ON fell by 5.06%, resuming the negative trend of the last few sessions, after the respite of the previous day, when it closed up by 5% after announcing that Ibama had issued an operating license for the FPSO Atlanta platform vessel.
– CVC BRASIL ON fell 2.67%, reversing its opening high, reacting to the operator and travel agency’s announcement the day before that they had reached an agreement to reprofile some of its bonds, which should help give the company flexibility to improve its capital structure. At its morning high, it rose 8.56% to 2.03 reais.
– RAÍZEN PN closed up 2.34%, on the backdrop of Raízen Fuels Finance’s announcement of $1 billion in 10-year green bonds in the foreign market. The resources will be used to finance and refinance eligible green activities and projects, liability management and general corporate purposes.
Source: Terra
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