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Wednesday, December 7, 2022

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Why is it rising steadily abroad and the Ibovespa not?

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Brazilian stock exchange is the only one that rises in the year in local currency and dollar, comments operator (Image: Diana Cheng/Money Times)

When looking at the quotation screen of this Wednesday’s trading session (28), many investors must be asking themselves the same question: after all, why new york bags are rising steadily today, while the Ibovespa patina?

The answer to this question also lies in the numbers, but not just the day. “Our stock market is the only one that rises in the year in local currency and dollar”, replies a senior equities trader at a national brokerage.

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Looking at the screen, he cites the appreciation of 3.73% of the Ibovespa in the year until early afternoon, in local currency. In foreign currency, the appreciation of the main Brazilian stock index is 8.48%.

Meanwhile, the three main US stock indices are suffering significant losses. O dow jones it’s the S&P 500 fall by about 20% each in 2022, while the fall of the Nasdaq since January it has fallen by 30%.

resilient real

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Hence, the performance of currencies is also important. After all, while the dollar generally gains ground in relation to rivals, the real has bravely resisted.

“Among the main currencies, only two rose against the dollar in the year”, emphasizes the same operator mentioned above, still looking at the chart on the screen.

In the lead is the real, with appreciation of just over 6% since January. Further behind is the Mexican peso (+1.73%).

For the professional, the operations of carry trade in the midst of acting at the forefront of the Central Bank by raising the Selicthe appreciation in the prices of commodities and the flow of foreign investors to the Brazilian stocks explain this resilience of the real. “Commodities helped in the balance and the ‘gringo’ also comes after interest”, he says.

Elections stall in the short term

In any case, the proximity of the first round of elections presidential elections, on Sunday (2), shuts down local businesses. “The election is taking a toll on assets around here”, comments the experienced operator.

However, after this short-term factor, he recalls that the performance of international markets is more outdated when compared to Brazilian assets. And he warns, in case of new turbulence coming from abroad: “Here there is more fat (to burn)”, he concludes.

With less than 1h30 to go before the end of the trading session, the Ibovespa moved sideways, up 0.18%, still below 109,000 points. Meanwhile, in Wall StreetDow Jones, S&P 500 and Nasdaq rose by around 1.5% each.

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Source: Moneytimes

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