FHC tells Bolsonaro to learn economics or shut up.

247 - "The stock market fell, Petrobras shares plummeted. Those who don't assess the consequences of their words create uncertainty. We don't always control the economic situation. Policies, especially those coming from the most powerful, are dangerous. The country pays a high price. Hopefully, those who know little will learn or remain silent," posted former president Fernando Henrique Cardoso, regarding Jair Bolsonaro's intervention in Petrobras' pricing policy.

Check out his tweet and the Reuters report below:

The stock market fell, Petrobras shares plummeted. Those who don't consider the consequences of their words create uncertainty. We don't always control economic factors. Policies, especially those from the most powerful, are dangerous. The country pays a high price. Hopefully, those who know little will learn or remain silent.

— Fernando Henrique Cardoso (@FHC) April 13th 2019

SAO PAULO (Reuters) - The Ibovespa closed down 2 percent on Friday, pressured by the plunge in Petrobras shares, which lost 32 billion reais in market value amid concerns about the state-owned company's independence after President Jair Bolsonaro pressured the oil company to reconsider its decision on raising diesel prices.

The Ibovespa, the benchmark index of the Brazilian stock market, fell 1,98 percent to 92.875,00 points. Total trading volume reached 20,56 billion reais, well above the year's daily average of 16,2 billion reais. For the week, the Ibovespa accumulated a decline of 4,36 percent.

News involving Petrobras dominated the spotlight on the last trading day of the week, after the company abandoned plans to raise diesel prices at refineries starting this Friday following interference from Bolsonaro, amid concerns about a possible new truckers' strike.

Bolsonaro defended on Friday "a fair price" for fuel and said he wants to be convinced by the state-owned company about the need for the increase.

“Investors were caught off guard by Bolsonaro’s ‘stroke of the pen.’ The entire discourse of state-owned companies without political interference is lost,” highlighted Pedro Menezes, a member of the equity investment committee and partner at Occam Brasil Gestão de Recursos, noting that the market as a whole has been affected.

"The main focus continues to be on pension reform, but this situation does nothing to help market sentiment," he said. 

Analysts at BTG Pactual released a report titled 'Déjà Vu', stating that it is necessary to determine whether it was a temporary decision motivated by political reasons, such as avoiding another strike, or a change in how the government perceives the company's operational freedom.

Friday also had as a backdrop the proximity to the expiration of stock options, which takes place on Monday on the São Paulo stock exchange and has Petrobras shares among the most liquid series of the exercise.

The plunge in the oil company's shares shielded the Brazilian market from the benign external bias, with positive performance on Wall Street following corporate results, as well as a rise in commodity prices (oil and iron ore), while the dollar weakened against other global currencies.

HIGHLIGHTS

- Petrobras ON shares plummeted 8,54 percent and Petrobras PN shares plunged 7,75 percent, resulting in a loss equivalent to 32,4 billion reais in the company's market value. The company canceled a 5,7 percent increase in the price of diesel starting this Friday, maintaining the price at 2,1432 reais per liter, as practiced since March 22. The devaluation was the largest drop in the company's shares since June 1st of last year, when the company's then-CEO, Pedro Parente, resigned.

- ELETROBRAS PNB and ELETROBRAS ON fell 4,97 and 5,24 percent, respectively, affected by the more negative sentiment in the market due to concerns about government interference in state-owned companies.

- Banco do Brasil fell 3,17 percent, the worst performance among banks in the Ibovespa index, also affected by fears of possible government intervention in companies controlled by the federal government. Itaú Unibanco PN retreated 1,05 percent and Bradesco PN dropped 0,91 percent. Santander Brasil Unit resisted and rose 0,2 percent.

- VALE closed down 0,6 percent, also succumbing to the general pessimism, despite the rise in iron ore prices in China, amid increased demand from Chinese steel mills. CSN, which has also benefited from favorable expectations about iron ore, rose 3,53 percent.

- JBS rose 4,44 percent to 17,64 reais, a new record high, against a backdrop of positive prospects for the food company, mainly regarding the beef cycle, as well as the potential effects of African swine fever in China, among other factors. In the sector, BRF closed up 1,71 percent.