Ibovespa down 0.77% on adjustment and outside to end a string of eight trading sessions higher; The dollar rose 1.12% to R$4.94

The Ibovespa closed this Tuesday (16) down 0.77% at 108,193 points, breaking a string of eight highs. The main index of the Brazilian Stock Exchange suffered partly from a realization after the winning streak, but there was also an impact from the external scenario.

“Everything was positive today as Petrobras surged higher and was able to erase the losses we had at the end of the trading session. However, the drop is not impressive as we had eight days of highs at Ibovespa. It’s normal to make a profit,” said Anderson Meneses, CEO of Alkin Research.

The state-owned oil company rose despite announcing the end of international parity and price cuts. According to experts, some of the changes were less radical than expected – despite the real test yet to come. Petrobras Common and Preferred Stock (PETR3;PETR4) increased by 2.24% and 2.49%, respectively.

“Despite the price reduction, there is hardly any impact on the results. The company’s pricing policy has changed, but not dramatically,” commented Matheus Spiess, analyst at Empiricus Research. “Ibovespa is testing its first decline after many days of rising. It’s even welcome. Corrections are part of the market. However, the index does not tell the full story of the stock market, because the small caps They suffered well while Petrobras sustained its downfall.”

Rodrigo Cohen, CNPI analyst and co-founder of Escola de Investimentos, points out that there was also some optimism during the trading session regarding the fiscal framework disclosure.

“The disclosure of the text was well received by the market. The rapporteur, Claudio Cajado, then gave an interview in which he gave more details on the framework and said he expected the text to be voted on next week at the latest. Haddad also said he’s confident the framework has been approved,” Cohen said.

However, experts pointed out in the afternoon that the rigid text increases predictability, but can shorten the lifespan of the rule.

The Brazilian yield curve rose overall. DIs for 2024 increased 1.5 basis points to 13.31% and 2025 increased by seven points to 11.74%. Contract rates for 2027 were 11.27% plus 12 points and for 2029 11.56% plus 14 points. DIs for 2031 were 11.56%, up 16 points.

“With the high interest rates, we have seen retailers drop, particularly Maganize Luiza. Its actions today are also being penalized after it announced poor results, with a net loss of BRL 309.4 million in the first quarter, an amount more than three times the loss reported for the same period in 2022.” explains the analyst.

The common shares of Luiza Magazine fell 22.83%. Next came the common stock of BRF (BRFS3), with minus 9.17%, after the company also published its figures for the period from January to March.

The dollar strengthened against the real, rising 1.12% to R$4,942 buys and R$4,943 sells. However, the US currency gained strength globally – the DXY rose 0.18% to 102.62 points.

In New York, the Dow Jones, S&P 500 and Nasdaq fell 1.01%, 0.64% and 0.18% respectively.

“The fiscal framework is on investors’ agendas and, in terms of the international macro scenario, the issue of the US debt ceiling, to be decided by June 1st. This causes some stress in the market. The issue of America’s debt is becoming more of a concern by the day, although a default is unlikely,” says Meneses.

The United States Government and the United States Congress, particularly the House of Representatives, Currently, the US is at an impasse over whether or not to authorize an increase in the federal debt ceiling. The VIX, which is considered the fear index, rose 5.08% to 17.99 points.

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