BRAZIL: Ibovespa Surpasses 79,000 Points, Pulled By Global Risk Appetite

The Ibovespa reversed an initial decline to end up 0.54% Friday at 79,071.46 points – a new record closing level. The index had a weekly gain of 3.5%, amid rising global risk appetite after disappointing employment data in the U.S. increased bets that interest rates in the country would grow more slowly.

According to H. Commcor’s chief operating officer, Ari Santos, the fact that the United States created 148,000 jobs in December, compared with the 185,000 forecast, fueled expectations that the U.S. central bank could postpone hikes in interest rates.

“The overall level of activity abroad is favorable, and there is a mix of important convergence for risk-taking by investors,” said Eleven Research chief strategist Adeodato Volpi Netto.

Santos noted the 5.27% fall in Embraer shares.

“News indicated that Boeing is discussing ways to circumvent the government’s resistance to a takeover of Embraer by US$ 28 per ADR,” but the price is seen as too low by investors, Santos said.

Volpi Netto believes traders could take profits on Monday and pull the Ibovespa down. “But it would only be a punctual accomplishment, not a reversal of the trend,” he said. Santos sees a big chance that the index will remain above the 79,000 points and get 80,000 points on Monday.

The locally traded U.S. dollar closed down by 0.03%, quoted at R$ 3,234, accumulating four days of devaluation against the Brazilian real. The greenback opened bullishly, but the positive sign was immediately reversed late in the morning, after data on the U.S. job market in December.

The material has been provided by InstaForex Company – www.instaforex.com