By Paula Arend Laier
SAO PAULO (Reuters) – The Ibovespa sank nearly 3% this Friday, touching lows since May, amid the sharp drop in Vale shares, but also pressured by fears about the domestic scenario that have bolstered profit-taking moves in the last trading session of the month.
Reference index of the Brazilian stock market, the Ibovespa closed down 2.92%, at 122,010.92 points, according to preliminary data, accumulating a decline of 2.4% in the week and 3.8% in the month. It was the first monthly loss since February and after an increase of 15% in the previous four months. The financial volume this Friday totaled 29.7 billion reais.
In the Brazilian scenario, the interview of President Jair Bolsonaro to a radio had poor repercussions in which he once again cited an eventual maintenance of emergency aid as well as an increase in Bolsa Família. Investors fear the government will take a more expansionary fiscal bias as its popularity in polls declines.
Sources also told Reuters that the federal government plans to include a gas voucher in the overhaul of social programs that will be announced in August to offset record fuel increases.
The dollar advanced more than 2% against the real and the rates of DI contracts registered relevant increases.
In addition to these factors, concerns persist about the behavior of inflation in the country, increasingly distant from the center of the target defined by the Central Bank, with prospects for the Selic base interest rate at the end of the year reaching 7%, according to the latest Focus survey .
Vale’s shares fell 5% on Friday, affected by the fall of iron ore futures contracts in Asia. Prices were hit by a decline in domestic demand and China’s decision to cut production.
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