Ibovespa falls more than 3%; dollar rises 4,7% in the month.

Infomoney - The Ibovespa closed this Thursday (30) with a drop of more than 3%, but it did not prevent the index from ending April with gains of 10,25%, with investors reacting positively to expectations of the reopening of major economies after harsh social isolation measures due to the coronavirus pandemic and with hopes of progress in the treatment of Covid-19.

As a result, the Brazilian stock market recorded its best month since January 2019, when it registered gains of 10,82%, while it was the best April for the Ibovespa since 2009, when it advanced 15,55%, according to data from the consulting firm Economatica. Despite the strong appreciation in April, the index still accumulates losses of 30% in 2020.

After the market panic in March, April was marked by the beginning of a recovery, as investors assessed the impacts of the coronavirus outbreak and some regions showed signs of having left the worst behind.

In Brazil, however, the political climate threatened to dampen the positive sentiment, although it did not erase the strong gains of the month. In particular, the Ibovespa suffered from the dismissal of former Health Minister Henrique Mandetta, but especially from Sergio Moro's departure from the Ministry of Justice last week.

At the time, the stock market fell by more than 5%, with investors fearing that Paulo Guedes could be the next to leave – a concern that has been reassured in recent days – but also because of Moro's allegations of an attempt by Bolsonaro to interfere with the Federal Police.

The Stock Exchange this Thursday

On Thursday (30), the Ibovespa closed with a drop of 3,20%, to 80.505 points – with a rise of 6,87% in the week -, pulled down by the sharp fall in bank stocks, especially Bradesco, which plummeted around 7% after releasing its results, in addition to the decline of almost 4% in Vale (Click here to see the stock highlights.).

Meanwhile, the commercial dollar rose 1,55%, quoted at R$ 5,4363 for buying and R$ 5,4380 for selling – closing the month with an appreciation of 4,7%. The May futures dollar, in turn, advanced 1,71%, to R$ 5,427.

In the futures interest rate market, the DI (interbank deposit rate) for January 2022 fell 4 basis points to 3,62%, while the DI for January 2023 rose 3 basis points to 4,80%. The contract for January 2025 advanced 3 basis points to 6,50%.

According to the Levante analysis team, the overall scenario is still positive, but today's session was impacted by a combination of negative factors, which ultimately dragged the index down.

Among the figures that impacted the market today, in addition to weaker economic indicators abroad and in Brazil, the drop in Bradesco's profit, profit-taking after three strong consecutive gains, and the holiday this Friday, put investors in a cautious mood and weighed on the stock market. "In this scenario, the day is negative for the stock market, however, the positive outlook remains strong," assesses Levante.

Abroad, the day saw declines, but also positive records on Wall Street. The Dow Jones and S&P 500 indexes fell 1,17% and 0,92%, respectively, on Thursday, but recorded their best months since 1987, advancing 10,5% and 12,8% in April.

Economic indicators

One of the most anticipated pieces of data of the day, the number of unemployment claims in the US Last week's figure reached 3,84 million, and despite the drop compared to the previous week, it was slightly above the median expectation of economists compiled by Bloomberg, which pointed to 3,5 million claims.

With this, the total number of unemployment benefit claims in six weeks, since the beginning of the new coronavirus crisis, exceeded 30 million. Claims in the week ending April 25 reached their lowest level in a month, after hitting their highest level in the week of March 28, when they reached a record 6,87 million.

Meanwhile, Americans' personal income fell 2% in March, against a projection of 1,7%, while consumption plummeted 7,5%.

Here in Brazil, data from the Continuous National Household Sample Survey (PNAD), released by the Brazilian Institute of Geography and Statistics (IBGE), showed that the unemployment rate in the country rose to 12,2% in the quarter ending in March, affecting 12,9 million people and already showing the initial impact of the coronavirus pandemic on the country's labor market.

The expectation, according to Bloomberg consensus, was that the unemployment rate in Brazil would accelerate to 12,5% ​​in March, compared to 11,6% in the moving quarter ending in February.

In Europe, Eurostat reported that the European Union economy contracted by 3,8% in the first quarter of 2020, the worst result since 1995.

The fall in the GDP of the European bloc occurred because of the advance of the coronavirus epidemic, which led to the shutdown of services, the closure of businesses, and quarantine measures in Italy, Spain, France, Belgium, and Germany. Meanwhile, the unemployment rate rose to 7,4% of the workforce in March.

Meanwhile, the European Central Bank (ECB) decided to keep key interest rates unchanged amid the region's deep economic crisis, also stating that it is ready to increase its stimulus program if necessary.

The ECB has already implemented a massive stimulus package to mitigate some of the economic shock. In March, the central bank began buying government bonds as part of a €750 billion package and reduced banks' lending costs to support lending activity.