The low visibility regarding the electoral race once again caused a strong fluctuation in prices at Ibovespa this Thursday. At the start of the trading session, the results of the Bloomberg/AtlasIntel survey, which showed a large advantage for President Luiz Inácio Lula da Silva (PT) over right-wing candidates in a possible second round, in addition to a high rejection rate for Senator Flávio Bolsonaro (PL-RJ), generated a bad mood in the market.
However, at the beginning of the afternoon, the statements of Senator Ciro Nogueira (PP-PI) to Valor, indicating a lesser willingness of Jair Bolsonaro (PL) to risk the candidacy of Flávio Bolsonaro, if his son does not improve in the polls, once again gave an impetus to risk assets. At its intraday high, Ibovespa reached 158,495 points.
Towards the end of the day, the index returned part of the increase following the announcement that former President Jair Bolsonaro (PL) would grant an interview to the Metropoles portal tomorrow. The market expects the country’s former president to use the opportunity to strengthen his son’s candidacy. As a result, the index ended with a gain of 0.38%, at 157,923 points, far from the minimum of 157,124 points.
After two sessions of losses, the banking blue chips experienced a day of correction. In the end, it was BTG Pactual shares which were the highest point of the rise, with a gain of 1.95%. Other stocks rose massively: Santander Units (+1.52%), Itaú Unibanco PN (+0.51%), Bradesco PN (+0.44%) and Banco do Brasil (+0.19%).
This movement occurred after two sessions of more intense losses on bank stocks, against a backdrop of electoral unrest. For the partner and CIO of equities at Ibiuna Investimentos, André Lion, the explanation for the decline in shares is technical. “A lot of local funds were holding bank stocks. There was a noise that no one expected and investors reduced some of the risk by selling what they had,” he says. “But if an investor wants to sell and no one wants to buy, the funnel becomes small. If everyone tries to sell, the stock falls like a ‘brick’,” adds the manager, who currently holds a position in Bradesco and BTG Pactual.
Despite the relief observed today on the local stock market, Ibiuna’s associate says that pessimism regarding the electoral scenario within Faria Lima remains great. The executive, however, claims that it prefers to analyze electoral facts “in relative terms” and that it has not made significant changes to the portfolio due to the distance from the elections.
“Unlike previous cycles, the discussion started earlier than expected and the information is still very volatile. It is still pre-candidates. Flávio’s pre-candidacy has opposing positions,” Lion reflects.
While the banks had a day of recovery, the star commodities stocks closed mixed: Petrobras PN fell 0.58%; Vale’s ONs gained 0.26%, taking into account positive assessments from investment banks.
For JP Morgan, Vale remains the global mining company with the most attractive multiples, at a significant discount to the average Australian mining company. The bank has a buy recommendation for the stock, with a price target of R$86.
Jefferies considers Vale one of its favorite stocks for Latin America, alongside Itaúsa, RD Saúde, Totvs and WEG.
In the macroeconomic scenario, although the Central Bank’s Monetary Policy Report (MPR) ruled out the possibility of a cut in interest rates at the January Copom meeting, the President of the BC, Gabriel Galípolo, said that there was no “given arrow” nor “closed door” for the next collegial meetings. He reiterated that there will not be a single indicator or event that will determine the decisions of the monetary authority.
Today, the volume traded on Ibovespa stood at R$16.6 billion and on B3 at R$26.2 billion. Meanwhile, on Wall Street, the major indexes closed higher: the Nasdaq rose 1.38%; the S&P 500 advanced 0.79%; and the Dow Jones gained 0.14%.
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