Rumors of a scandal involving PSDB cause stock market to plummet.
The index experienced a rollercoaster day; it rose as much as 1,31% at the opening of trading this Wednesday, the 8th, amid election speculation, but then suffered a drop of more than 2% amid rumors that an accusation against candidate Aécio Neves (PSDB) might be published in the press; however, this information has not been published or confirmed so far; with the Fed indicating that it will keep interest rates low for a "considerable time," the Bovespa mitigated its losses, closing down 0,66%.
By Lara Rizério • Rodrigo Tolotti Umpieres
SÃO PAULO - The Ibovespa had a rollercoaster day. The index rose as much as 1,31% at the opening of trading, but fell 2% amid rumors that a complaint to be made by the press would affect the candidacy of Aécio Neves (PSDB), a fact that has not yet occurred. However, after the FOMC minutes, the index mitigated its losses, but not enough to turn the index upwards, thus closing with losses of 0,66%, at 57.058 points. The financial turnover on the Bovespa reached R$ 9,39 billion.
Petrobras initially fell by 5,5%, but the decline eased to around 3%, while Banco do Brasil erased its losses. The FOMC minutes showed that the Fed will maintain the expression "for a considerable time" when referring to low interest rates, and the dollar reduced its gains recorded today.
But election rumors are weighing more heavily on the index. "All Brazilian assets suddenly turned around after rumors that the press will publish an accusation that could affect Aécio's candidacy," says Davison Santana, strategist at Bloomberg. However, so far nothing has been disclosed or confirmed about the content of the information that is supposedly to be released, nor has the credibility of the information been confirmed.
Furthermore, the market moved towards protection ahead of polls to be released tomorrow, particularly those by Datafolha and Ibope. Expectations for the polls are mixed: while some mirror polls point to a technical tie between Dilma and Aécio, others indicate the Workers' Party candidate with a larger-than-expected lead over the PSDB candidate.
Also noteworthy is the report from the Moody's rating agency, which commented on the Brazilian situation after the first round of the presidential elections.
According to the agency, Brazil's rating does not depend on who wins the election, but rather on the new government's ability to reverse the deterioration that has been observed in debt metrics, fiscal policy, and the economic situation. Moody's says there is little clarity in the proposals presented so far by Aécio Neves (PSDB) and Dilma Rousseff (PT), which may be a political strategy.
Even the minutes from the last FOMC (Federal Open Market Committee) meeting, which boosted markets abroad, didn't have as much of a boost for the stock market here. The minutes showed that some Fed members wanted to postpone the speech for "considerable time," but avoided it in part because of concerns about how the market would view this policy, as well as believing that prudence was needed to assess economic conditions.
Oi falls sharply. Aside from economic and election news, Oi (OIBR4) stands out, experiencing the biggest drop in the index after the announcement of the departure of its CEO, Zeinal Bava. According to Bradesco BBI, the decision, taken at a time when the company is facing a delicate financial situation, reinforces the challenging outlook for the telephone company.