By Andre Romani
SAO PAULO (Reuters) – The main index of the Brazilian stock market advanced on Wednesday, after four consecutive lows, in the face of positive indications in negotiations between Ukraine and Russia and with the market waiting for monetary policy decisions in Brazil and in the United States. U.S.
Commodity-linked stocks were in the spotlight again, with the rise in Vale and steel stocks after China’s declaration of authority. Companies in the education and energy and sanitation sectors were yielding at the opposite end.
The session is also marked by the expiration of options on the Ibovespa.
At 11:33, the Ibovespa rose 1.98% to 111,115.04 points. The financial volume was 7.54 billion reais.
The index followed movement abroad, with optimism about China and the chance of an agreement between Ukraine and Russia, according to Pedro Paulo Silveira, manager at Nova Futura.
“As the market fell sharply in recent trading sessions, a correction like this is natural and does not necessarily change the scenario,” he said.
The Federal Reserve’s decision will be announced at 15:00 (Brasília time), with a press conference by the President of the US central bank, Jerome Powell, following. The expectation is for the start of the cycle of high interest rates in the country with an increase of 0.25 percentage point.
In Brazil, the Copom decision comes only after the market closes and the majority projection is for an increase in the Selic by 1 percentage point.
In both cases, the market is attentive to signs of what the next steps of monetary policy will be.
Stocks rose also helped by commentary on negotiations between Russia and Ukraine. Ukrainian President Volodymyr Zelenskiy said the talks were becoming “more realistic”, while Russian Foreign Minister Sergei Lavrov declared there was “some hope of compromise”.
The positive mood this morning was also supported by a signal from China’s deputy prime minister that the country should adopt market-friendly policies and seek to reinvigorate its economy. The speech had special repercussion in the commodity market, recently shaken by news around the resurgence of coronavirus cases in the Asian country.
The domestic market was still digesting the 0.1% drop in the Brazilian services sector in January compared to December, below the 0.2% high estimate, according to a Reuters poll of analysts.
On Wall Street, the main stock indexes advanced between 0.9% and 2%.
HIGHLIGHTS
– VALE ON rose 3.4%, after iron ore contracts in Asia advanced from a low in two weeks driven by indications from the Chinese government. CSN ON
– CVC BRASIL ON shot up 11%. The company recorded a net loss of 145.8 million reais between October and December, although net revenue has almost doubled in the period compared to the previous year.
– PETROBRAS PN and ON rose 0.6% each. Brent crude traded higher and was back above US$100 a barrel, amid positive signs in supply and lower fears of reduced demand from China, although the prospect of further negotiations in Ukraine limited gains.
– YDUQS ON plunged 9.3%, after a worsening financial result at the education group led to a profit of almost zero in the fourth quarter, much weaker than analysts had expected. COGNA ON lost 1%.
– MRV ON rose 4.4% before releasing its balance sheet, expected after the market closes. BRASKEM PNA and PETZ ON, which also announce results at night, rose 0.3% and 2.6%, respectively.
– MAGAZINE LUIZA ON had a rise of 4.5%, after a fall the day before after the release of the fourth quarter balance sheet.
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