Quotation of the dollar today and the stock market after Bolsonaro on Datafolha – 20.10.2022. – Mercado

The Brazilian stock market closed higher this Thursday (20), prevailing a predominantly negative scenario abroad. In relation to Bolsa do Brasil, the Ibovespa index advanced by 0.77%, to 117,171 points.

The main contributor to this increase was the appreciation of shares of exporters of metal raw materials and companies in which the federal government participates.

State-owned enterprises took the first places among the best performers of Ibovespa. Petrobras advanced 2.96%, the most traded of the session, and Banco do Brasil jumped 4.68%, the highest value of the day.

Analysts say those companies have benefited from investors’ assessment that re-election candidate Jair Bolsonaro (PL), whose vision is seen as more in line with the market, now has a chance to win a runoff against his opponent, the former president. Luiz Inácio Lula da Silva (PT), after the publication, the day before, of the latest Datafolha survey.

Lula is ahead of Bolsonaro, winning 49% of the total vote, compared to 45% for his rival. Candidates are therefore tied with plus or minus two percentage points of margin of error. Blanks and zeros add up to 4%, and undecided 1%.

“The technical connection of the two bids is what brings this spirit to the local property,” said Fábio Guarda, partner and manager of Galapagos Capital.

In a poll conducted last week, the PT received 49% of the total vote and the current president 44%.

“The market has realized that Bolsonaro is now more likely to win the second round than it was, for example, right after the first round,” commented Filipe Villegas, equity strategist at Genial Investimentos.

Expectations of the lifting of anti-Covid restrictions in China also explained part of the positive performance of the stock market, as companies that produce iron ore and steel, materials for which the Asian giant is in high demand, were among the most valued in the session. CSN, Usiminas and Vale grew by 3.96%, 2.99% and 1.28%, respectively.

Chinese government officials are discussing easing the quarantine imposed on foreigners entering the country, according to news published Thursday by Bloomberg. Currently, upon entering the country, travelers must spend seven days in isolation in a hotel and another three days at home.

Heitor de Nicola, an equity specialist at Acqua Vero, explains that any expectation of an improvement in Chinese economic activity, even a small one, can generate consistent movements in the Brazilian stock market, as the mining company Vale has a large influence on the Ibovespa.

“China imports 80% of the iron ore sold, and they buy from four companies, three Australian and one Brazilian, which in this case is Vale,” Nicola said.

The price of iron ore also showed a recovery on Thursday, a day after falling to around $90 per dry tonne, the lowest level of the year, a day earlier.

Businesses related to domestic consumption, which more closely reflect expectations about the direction of the country’s economy, had a negative effect. For some analysts, this shows the concern of the domestic market with expectations of an increase in public spending given the position of the two candidates in the race for Plato.

Americanas and Via fell 13% and 7%, respectively, also reflecting analyzes that the e-commerce sector will underperform in the third-quarter earnings season.

“The candidates talked about increasing wages, reducing taxes, and this raises awareness of the problem of fiscal risk, so companies that are more connected to the domestic economy suffer more,” commented Rodrigo Moliterno, head of variable income at Veedha Investimentos.

Abroad, the stock exchange in New York closed. The parameter indicator S&P 500 lost 0.80%. The Dow Jones and Nasdaq indices fell 0.30% and 0.61%.

Dollar falls as pound rises day after Liz Truss quits

With the slight global retreat of the dollar, the real appreciated the most among major currencies against the US currency.

On the domestic exchange market, the dollar ended trading with a drop of 1.08%, quoted at R$5.2180.

Villegas, of Genial Investimentos, pointed out that the slight recovery of the pound after the resignation of British Prime Minister Liz Truss this Thursday (20) could be one of the factors that contributed to the weakening of the dollar on Thursday.

The pound sterling was up 0.54% against the dollar at $1.1231. During the six weeks Truss was in charge, the currency hit historic lows against the dollar due to a crisis of confidence in the market caused by the government’s economic package.

However, compared to the real, the pound closed with a devaluation of 0.98%, at a value of R$5.8598.