© Reuters. Ibovespa falls 1.77%, to 101.8 thousand points, but advances 3.09% in the week
The returned the high of the previous day, yesterday as today on top of the fiscal framework, but gained 3.09% in the week – after a loss of exactly 3.09% accumulated in the preceding interval, the last of a series of five weekly falls also started with a decrease of 3.09%, still in February.
In the week just ended, the positive performance reflected the fat that had accumulated in the last five sessions. Today, disconnected from the positive sign on foreign exchanges, the B3 (BVMF:) benchmark fluctuated between a low of 101,475.57 and a high of 104,040.62, leaving the opening at 103,714.34 points. At the close, the drop was 1.77%, at 101,882.20 points, with a turnover of R$ 26.7 billion in the session. In March, the Ibovespa retreated 2.91%, coming from a loss of 7.49% in February, after opening the year positively, with an increase of 3.37% in January. In 2023, it now yields 7.16% at the end of the first quarter, the worst start to the year since 2020.
The firm drop in the first quarter of 2023 contrasts with the performance registered in the same period of 2022, a gain of 14.48% which had been the highest for the Ibovespa since the last three months of 2020 (+20.51%) and the best first quarter since 2016 (+15.47%). In the last session of March 2022, the index closed at the low of the day, but this low practically corresponded to 120,000 points (then at 119,999.23). In March of last year, the Ibovespa accumulated a rise of 6.06%, after advances of 0.89% and 6.98%, respectively, in February and January.
The poor performance in this opening of the year is added to the lateralized behavior of the Ibovespa in the last quarter of 2022, when it closed at 109,734.60 from 110,036.79 at the end of September – a negative quarterly variation of 302 points. In turn, the third quarter of last year was one of recovery, after the Ibovespa, as now, having wandered below 100 thousand points in June 2022 – thus, in the 3rd quarter it recovered by 11.66% after a plunge of almost 18 % in the previous one, which was the biggest quarterly drop in the B3 index since the height of fear about the pandemic, in January-March 2020, when it had retreated around 37%.
In , the Ibovespa reached the end of the first quarter of 2023 at 20,100.65 points, with the US currency down 2.99% in March against the real. In February, when the Stock Exchange fell by around 7.5%, the Ibovespa, in dollars, was practically at the same point, then at 20,082.66 points, having ended January at 22,343.36 points and December 2022 at 20,783.06.
If yesterday, driven by the official announcement of the fiscal framework, the Ibovespa walked ahead of foreign exchanges and rose 1.89%, today it made the opposite movement, returning a good part of the recovery on top of the same factor: the fiscal framework. On Thursday, despite the reservations made by several economic analysts, who paid attention to optimistic assumptions in the general lines of the proposal, risk appetite boosted Brazilian assets, including B3 shares. Today, the real continued to appreciate against the dollar, quoted at R$5.06 at the close, but the stock exchange and interest rates futures did not sustain the movement of the previous day.
Investors’ attention now turns to the future technical detailing of the framework, with the perception that, in order for the government to comply with the benchmarks for the performance of the public accounts presented for the coming years, tax increases must come first, also considering the economy performance.
“The week was a little better, despite the bad performance today. The improvement, in any case, was insufficient to make the Stock Exchange rise in the month and in the year. correcting the exaggerated pressure on future rates that came from last year”, says Eduardo Cavalheiro, manager of Rio Verde Investimentos. “The general guidelines of the framework came yesterday, and the market’s expectations, which were low, resulted in a reasonable reaction. It is now necessary to see the measures from the revenue side. In Brazil, in general, expenses are established and then run behind the recipe.”
Cavalheiro also notes that the corporate results for the fourth quarter of 2022, the season for announcement of balance sheets with the deadline ending this March 31, brought – as expected – weaker revenues, reflecting in particular the level of interest rates and credit difficulties. “Very rare were the companies that had revenue improvement in relation to the third quarter”, he adds. “And the first quarter of this year tends to be weak for companies too.”
“The daily volume is blocked on the Exchange – it was BRL 30 billion last year and is now around BRL 20 billion. There is a total lack of interest, with large redemptions in funds and many individuals selling direct. , but in March they started to sell as well. Prices are attractive, with many shares of quality companies at very low prices. But as long as there is no investor, they will not go up”, adds the manager.
“Until the end of January, the Ibovespa was doing well, and then came the realization process. It reached close to 115 thousand, then plunged to 97 thousand. Expectation for the reopening of China and the beginning of government – which was given the benefit of the doubt – they supported commodity stocks as well as companies related to our economy at the beginning of the year”, says Rodrigo Moliterno, head of equities at Veedha Investimentos.
In February, however, “the perfect storm began to form, with an even more restrictive perspective for the American interest rate”, he adds. “Here, the market became more questioning in relation to the tax due to the tension between the government and BC. March also had the banking crisis abroad, worsening the risk perception”, points out Moliterno. “With the framework, the scenario is still of an increase in the domestic debt.”
Thus, to a lesser extent at the end of the month and quarter, only 12 stocks in the Ibovespa portfolio managed to escape the negative sign of the session, with moderate gains. At the winning end, highlights today for CCR (BVMF:) (+2.81%), Cogna (BVMF:) (+2.75%) and Ultrapar (BVMF:) (+2.35%). In the opposite corner, companies from sectors exposed to the domestic cycle, such as MRV (BVMF:) (-7.13%), Soma (-7.00%) and Hapvida (BVMF:) (-6.43%).
Among the shares of companies with greater weight in the index, there were few positive exceptions, with emphasis on those of three large banks: Itaú (BVMF:) (PN +0.49%), Santander (BVMF:) (Unit +0.34 %) and Banco do Brasil (BVMF:) (ON +0.26%). Petrobras ON (BVMF:) and PN fell 2.18% and 2.17% respectively, and Vale ON (BVMF:) closed the day down 1.87%.
The financial market adjusted optimism about the performance of shares in the very short term, in the Broadcast Stock Market Thermometer this Friday, but the expectation of high for the Ibovespa remains majority. Among the participants, 57.14% said that the Exchange should accumulate gains next week and 14.29% expect losses, while for 28.57% the Ibovespa will have a neutral variation. In the previous Thermometer, 75.00% predicted an increase for the index this week, against 12.50% who projected low and another 12.50%, stability.