The dollar advanced against the real shortly after opening on Friday (21), in line with the US currency’s strength in international markets amid fears of monetary tightening in major economies and escalating political uncertainty in the UK.
Meanwhile, in Brazil, investors were watching the political news, as the country is about to enter the final week of campaigning before the presidential election.
At 9:07am (GMT), the spot dollar was up 0.57%, at R$5.2464 in a selloff, but was still on track to end the week well below last Friday’s close (14), from 5.3234 BRL.
On B3, at 9:07 a.m. (GMT), the first-maturity dollar futures contract rose 0.56% to R$5.2540.
This Thursday (20th), the dollar ended trading with a 1.08% drop, quoted at R$5.2180. The real has appreciated the most among major currencies against the US currency.
The Brazilian stock market finished higher on Thursday, overcoming a largely negative scenario abroad. Ibovespa advanced 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.
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.
In Europe, there was a slight recovery of the pound after the resignation of British Prime Minister Liz Truss.
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 due to a crisis of confidence in the market caused by the government’s economic package.