SÃO PAULO – Internal nervousness against the presidential election, added to the global tension regarding Turkey, causes the Ibovespa to operate in a strong fall on Friday. At about 1.30 pm the Ibovespa traded 1.24%, at 75.864 points, but in the worst case the 75.633 points (-1.54%) reached the lowest intradayscore since July 13, when it hit 75.553 points. The financial turnover of the index is already R $ 3.95 billion, which implies the projection of a volume of R $ 9.8 billion at the end of the session.
According to one operator, Ibovespa indicated earlier in the day that it would have a negative session, given the scenario of the devaluation of currencies rising in relation to the dollar and the resumption of tensions towards Turkey . He points out, however, that the climate for local markets deteriorated after the release of the XP / Ipespe poll about the intention to vote for president.
"Alckmin can not move forward," he says, pointing out Fernando Haddad (PT) has succeeded in absorbing the votes of former President Lula, suggesting that the PT candidate has a good chance to continue to the second round. The survey shows Jair Bolsonaro (PSL) with 21% of the voting intentions, followed by Haddad, with 15% – Geraldo Alckmin (PSDB) and Marina Silva appearing with 9%.
Political-electoral uncertainty has a major impact on the roles Eletrobras ON (-3.46%) and Eletrobras PNB (-2.43%) – the assets, which rose sharply yesterday, also respond to the BNDES new scheme for the privatization of company. Petrobras PN (-2.32%), Petrobras ON (-1.6%) and Banco do Brasil ON (-2.93%) also fell sharply.
The shares of other private banks, such as Itaú Unibanco PN -2.18%) and Bradesco PN (-3%) also show a largely negative performance. The retail trade fell as a bloc, with B2W ON (-5.11%), units of Via Varejo (-3.53%), Lojas Americanas PN (-2.87%) and Magazine Luiza ON (-1.69%)
Few papers can hold their own in the positive area, including Vale ON (+ 1.15%) – the company's export bias makes it profit from the higher dollar and iron ore in China. exporters – who usually benefit from the rise of the dollar – such as Suzano ON (+ 3%), Fibria ON (+ 0.9%) and Embraer ON (+ 0.6%) also high
The Brazilian foreign exchange market is also working with a steep dose of caution: at 13.32 the dollar traded 0.87% higher at R $ 3.9372, after rising to R $ 3.9528 at the height of the day, the highest level in two months, and if this level persists until the end of the session, this is the highest closing level since early 2016.
The Brazilian real is the second worst performance of the day in a list of the 33 most important global currencies. The behavior is only better than the Turkish lira, who once again loses ground after a brief cease-fire.
Even if you consider a longer period, the performance of the real is not much better. In the accumulated index of the year, the Brazilian currency has the fourth worst placement with a devaluation of 15.9%. Worse than the real ones are currencies of economies with much weaker fundamentals, either due to high inflation, current account deficits or public money loops.
The rise of the dollar in Brazil reflects, in addition to external issues, the sensitivity to political risk
The study emphasizes caution in the market, which yesterday the information that Alckmin could be the subject of legal cancellations. Although the risk of a challenge for his candidacy is low, there is concern about the political costs for a presidential candidate who has not yet managed to cancel his voting intentions.
The need for budgetary adjustment here increases the importance of the election result, which has become more cautious – and of mistrust – on the market. One of the worst moments of nervousness in the year came in the last three months of the first semester. The dollar rose 6.03% in April, 6.65% in May and 3.77% in June. At that time, concerns about the pace of monetary tightening in developed economies and then the crisis of truckers hit homes, which until now had reached a very optimistic and even conspiratorial political risk.
Capital Economics draws some lessons from the election of Mexico, which also affected the assets of the emerging couple. Investors have estimated for some time that the election campaign and the party machines would improve the prospects of "technocrat" Jose Antonio Meade. "But this never came true," say the experts at Capital Economics. Andrés Manuel López Obrador (Amlo) came before him. "The period of weak growth and corruption scandals in Brazil may also have created fertile soil for populist candidates."
From now on, the strength of the presidential candidates must be put to the test with the election campaign that began yesterday. Alckmin has the longest exposure time in free distribution, starting on 31 August. The expectation in the market is that this time of television – guaranteed with the alliance with the so-called "centão" parties – helps to make use of her candidacy, which has not yet come true. Next week, a number of surveys would have to move the markets.
"Another lesson from Mexico's election is that the victory of a leftist candidate is not necessarily a disaster for the financial markets," experts say. from Capital Economics. Mexico's peso and stock market recovered after Amlo's victory. "Brazil's balance sheets – particularly public finances – are in a much worse situation than Mexico, the reforms are more urgent and the chance of a market reaction greater." Importance
The negative mood of global investors with tensions in Turkey again dictates the pace of doing business with future interest rate contracts here in Brazil.
"The currency of Turkey has been devalued again and this attracts the other emerging countries, including Brazil, although the output gap is very open, the fair value will decrease sharply if the fair value falls sharply, which will lead to price transfer and will lead to an increase in expectations, the market starts to think about the position of the BC, "explains Marcos de Callis, chief strategist at Votorantim Asset.
At the beginning of the afternoon the DI January / 2020 traded 8.26% (8, 2% in the previous institution); DI January / 2021 has a percentage of 9.38% (9.26% in the previous adjustment); DI January / 2025 has a rate of 11.70% (11.5% with the previous adjustment)