August 5, 2021

The market commemorates the triumph of Bolsonaro and the stock market rises 3.85%

The market commemorates the triumph of Bolsonaro and the stock market rises 3.85%

The Brazilian market today commemorated the triumph of the far-right Jair Bolsonaro in the first round of the Brazilian presidential elections and, at mid-session, its main index, Ibovespa, advanced 3.85% to 85,487 points.

The Brazilian square looked favorably on the outcome of Bolsonaro at the polls, who was a step away from winning the elections in the first round, and began the day with an expressive rise of 6%, but moderated the gains as it progressed the session.

In the exchange market, the dollar depreciated 2.5% and was sold at 3,761 reais in Brazil at 12.30 local time (15.30 GMT).

Bolsonaro, representative of the most conservative sectors of Brazil and who won the first round with 46.05% of votes, has the support of investors thanks to its liberal economic proposal.

Its model contrasts with that defended by the Workers Party (PT), whose candidate, Fernando Haddad, will also be in the second round after obtaining 29.25% of support this Sunday, driven mainly by the northeast region of the country.

Backed by investors, the reserve captain Bolsonaro, nostalgic for the dictatorship and controversial for his public defense of torturers, has promised a series of privatizations and a reduction of the state if he comes to power.

"Reduce the number of ministries, extinguish and privatize state politics at the service of the Brazilian," said the right-wing deputy in a message he posted today on his Twitter account.

After strengthening its economic position, state companies rose strongly today in the Brazilian stock market and investors maintained the euphoria unleashed last week, when polls predicted Bolsonaro's advance to the second round.

The preferred shares of state oil company Petrobras, the largest company in Brazil, rose more than 10% during the morning and rose 7.68% in the middle of the session, the most negotiated of the day.

The papers of the Eletrobras electric company, on the other hand, sailed among the biggest rises of the day: the preferential ones appreciated a 12.78% and the ordinary ones 11.89%.

Bolsonaro's liberal program, molded by his adviser Paulo Guedes, moves away from the PT's proposal, in favor of economic interventionism and contrary to the fiscal adjustments carried out by the current president, Michel Temer.

The formation of the left has promised that if it wins in the elections it will repeal the labor reform approved by Congress and eliminate the ceiling of public spending, measures strongly defended by the market.


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