Ibovespa takes off from NY and has its 2nd high of the month, back to 116 thousand points By Estadão Content

2023-08-23 10:00:32

Ibovespa detaches from NY and has 2nd high of the month, back to 116 thousand points

The retested recovery this Tuesday, in which it reached only the second daily gain of this August, a month in which B3 (BVMF:) has suffered with the retraction of foreign investors, a segment that already accumulates net withdrawals in the region of BRL 10.6 billion in the interval until last Friday, the 18th. This Tuesday, the reference index of the Brazilian stock exchange rose 1.51%, to 116,156.01 points, managing to detach itself from the caution that prevailed in New York ( -0 .51%, -0.28%, +0.06%), especially in US bank stocks, after downgrading S&P’s credit rating for regional financial institutions.

On the day, the Ibovespa fluctuated from 114,433.39, the low that corresponded to the opening, to 116,285.57 points (+1.62%), with financial turnover once again very weak, at R$ 20.7 billion. In the week, the index starts to accumulate a slight gain of 0.65%, coming from losses over the previous four weeks. In the year, it still rises 5.85%. With the resumption of the 116,000-point line, the Ibovespa returns to the closing level it was at a week ago, at the close of the last 15th, when it reached the 11th of the series of 13 daily losses, the longest on record on the Stock Exchange, since 1968. This Tuesday’s rise was the highest since July 21 (+1.81%).

Although the external scenario, hazy for China as well as for the United States – the two largest economies in the world – remains the main factor for the lack of appetite for risk that has prevailed since the turn of July into August, the prospect of a final vote on the framework fiscal, possibly even during the night period in the Chamber of Deputies, contributed this Tuesday to some decompression in the exchange rate and in the interest curve, which helped the performance of the shares, observes Pedro Canto, an analyst at CM Capital.

Thus, with “crumpled” highly liquid assets, such as bank securities (BB (BVMF:) ON +2.26%, Itaú (BVMF:) PN +1.56%, Santander (BVMF:) Unit +1, 25%, Bradesco (BVMF:) ON +0.68%), the day was also a day of recovery for shares exposed to the external cycle, especially Vale (BVMF:), which rose 2.25% (ON) this Tuesday, at the head of the metallic sector (emphasis on Gerdau (BVMF:) PN +1.08%).

“Steel and mining had been well behind with concerns about China, the negative outlook on the Chinese economy that had prevailed in recent days,” says Gabriel Mota, equities trader at Manchester Investimentos. He points out that it closed, this Tuesday, at the highest level in three weeks, which also favored Vale, a share with the highest individual weight on the Ibovespa and which remains heavily discounted.

At the close, the mining company’s share was quoted this Tuesday at R$62.58, still yielding 7.21% in the month and 26.21% in the year. The ton of ore, in the most traded futures contract in Dalian (China), rose this Tuesday by 4.47%, to US$ 110.42.

Petrobras ON (BVMF:) and PN also advanced this Tuesday, respectively, 1.33% and 1.32% (maximum of the day at closing) even with the negative sign of and of , in London and New York, in the session . At the top of the Ibovespa, IRB (BVMF:) (+9.14%), Vibra (+7.61%) and Eztec (BVMF:) (+6.99%), with Marfrig (BVMF:) (-1. 83%), Petz (BVMF:) (-1.47%) and Carrefour (BVMF:) Brasil (-0.97%) leading the opposite line.

Despite the strength shown by the index on a very weak day, the external flow to the B3 remains a factor of concern. In the first 18 days of the month, with only one daily increase in the interval – last Friday -, almost half of the inflow of foreign capital in 2023 took the exit door, reducing the net balance for the year of this important segment to R $13.466 billion.

“American Treasury interest rates remain at the highest levels since 2007, and that has not yet affected the share price there, whose performance has been supported in particular by the technology sector, concentrated on the Nasdaq but with weight also on the S&P 500, in in the midst of news around artificial intelligence”, says the CM Capital analyst.

“Here, the perception of the tax has improved, and the Selic is falling, but the B3 is also seen as a proxy for China, due to its exposure to commodities, which helps to understand this withdrawal of foreigners in August.

With only domestic investors, it’s hard to go up,” adds Canto, noting that at the end of July, the S&P 500 was about 5% from its all-time high, and since then the New York broad index correction is 4, 39% in August.

“Something is not quite right with prices”, says the analyst, highlighting the mismatch between the level of stock indices in New York, even with the moderate correction underway, and the risk-free yields of Treasuries. As August is a holiday month in the northern hemisphere, with movements usually more contained in the period, a stronger adjustment may come in September with the normalization of business, also observes Western Asset’s variable income manager, Cesar Mikail – case, even there, do not come catalysts that change the caution regarding the external scenario.

In this context, the global market will be attentive to yet another edition of the annual symposium in Jackson Hole, especially to the pronouncement by the chairman of the Federal Reserve, Jerome Powell, on Friday, in search of possible clues about the American monetary policy, with those of reference there already in the range of 5% per year. Data, particularly those from the US job market, continue to come in strong, which changes the prevailing bias regarding the chances of a pause, the proximity of the end of the US interest rate hike cycle, which also guided the recovery of optimism of the market at the end of July, points out Canto, from CM Capital.