BRAZIL: Ibovespa Tracks Foreign Market And Falls Amid Profit-taking

Ibovespa, the benchmark stock index in Brazil, closed down 0.25% at 84,482.46 points on Tuesday, on another day of profit-taking tracking the negative external market climate amid a fall in the price of commodities. In the political arena, investors monitor the expectations for the discussion of the pension reform in Brazil.

“Outside, the market was in a more negative bias for risky assets. That unfavorable scenario influenced Ibovespa, being the main factor in today’s downturn, which is still seen as something punctual,” said Rafael Passos, an analyst at Guide Investimentos.

According to the economist at Floren?a Investimentos, Rog?rio Freitas, the fall in the price of commodities, especially oil, opened room for some volatility and brought downward pressure on the index.

“But it was a natural achievement. The market did not fall sharply, slowing down at the end of the trading session,” he said.

While the end of the parliamentary recess nears, the discussion on pension reform is being monitored by investors. In an interview, the Brazilian President Michel Temer said that the bill could be voted on in February or March even if lawmakers block the bill.

For Wednesday, Passos sees the external landscape still foggy, with the result of the Federal Reserve’s (Fed) monetary policy meeting and the possibility of a new fall in Ibovespa. Freitas sees in the movement of the end of the day an indication that the index could rise again.

The locally traded U.S. dollar closed higher for the third straight trading session, amid a correction and appreciation movement in the foreign market. In the domestic market, the pension reform left investors cautious. Against this background, the U.S. dollar ended up 0.44%, quoted at R$ 3.180.

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