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The Brazilian stock market experienced a significant upturn on Monday, November 4, 2024. The Ibovespa index, Brazil’s main stock market indicator, climbed by 1.87% to reach 130,512.13 points.
This surge was primarily driven by expectations of an imminent fiscal package announcement. Finance Minister Fernando Haddad hinted at the forthcoming release of public spending measures.
He stated that the technical aspects were well-advanced, suggesting readiness for an announcement. President Luiz Inácio Lula da Silva reportedly spent the weekend refining the fiscal plan.
The currency exchange rate reflected the positive market sentiment. The US dollar fell 1.47% against the Brazilian real, closing at R$ 5.7831 ($1.01).
In addition, investors closely monitored corporate news and third-quarter earnings reports. The market also reacted to the Central Bank‘s Focus Bulletin.
Financial analysts raised their inflation projections for 2024 and 2025, exceeding the central inflation target of 3%. Among individual stocks, Magazine Luiza and Cogna led the gains with over 11% increases.
These companies, operating in retail and education sectors, are particularly sensitive to macroeconomic factors like interest rates and inflation.
Brazilian Market Resilience
Vale, a major player in the Ibovespa, saw a positive performance. This aligned with the upward trend in iron ore prices, which closed 0.91% higher at $109.36 per ton in Dalian, China.
Petrobras shares also rose, supported by a nearly 3% increase in Brent crude oil futures for January 2025. In contrast, Azul extended its losses following credit rating downgrades by S&P Global and Fitch.
Braskem shares declined amid a CEO change announcement. The Brazilian market’s performance stood out against the backdrop of caution in US markets.
American investors were adjusting their positions ahead of the presidential elections and the Federal Reserve‘s monetary policy decision.
Recent polls showing reduced odds for Donald Trump’s victory influenced some market segments. The tight race suggests vote counting may extend over several days.
Regarding US monetary policy, consensus expects a 25 basis point rate cut, potentially bringing the federal funds rate to 4.50%-4.75%.
In short, this market movement highlights the complex interplay between domestic fiscal policies and global economic factors shaping investor sentiment.