What makes Ibovespa surpass 120 thousand points for the first time since August?

The appreciation of oil and iron ore, in addition to some balance sheets from Brazilian companies, this Thursday stimulated the rise of the Ibovespa, which, on Wednesday, 8th, interrupted a sequence of five increases, although it closed at a drop of just 0.08% (119,176.67 points). The balance sheet harvest remains on the radar, such as the results from Braskem (BRKM5) and Banco do Brasil (BBAS3). After the closing of B3, Petrobras’ quarterly balance sheet will be released (PETR3;PETR4).

The Ibovespa rises to the range of 120 thousand points, something last seen intraday on August 7 (120,103.93 points).

The progress also reflects the approval of the second round of tax reform yesterday in the Senate. According to economist Silvio Campos Neto, partner at Tendências Consultoria, the approval should be well received, “but it is something that depends on the price”.

“The increase is not so much due to the approval of the tax reform, whose objective of simplification is laudable, but it was approved in a way that is not structural”, assesses Enrico Cozzolino, head of analysis and partner at Levante Investimentos. “It goes up more due to the result of the flow, due to commodities, and because of some surprising company balance sheets”, adds Cozzolino.

For Dennis Esteves, partner and specialist at Blue3 Investimentos, the rise in oil and iron ore helps, in addition to some companies that reported good balance sheets.

“The approval of tax reform has little influence. The market was already maturing this. What motivates are external winds, there has been recent relief in Treasury yields and inflation in the United States shows signs of slowing down”, assesses Beto Saadia, investment director at Nomos. “This allows Brazil to continue reducing interest rates and there is an important factor that is the trade balance. In the midst of the rising Treasuries scenario a few days ago, it didn’t have much of an impact on the exchange rate,” says Saadia.

Furthermore, the weakness of the New York stock exchanges and the Chinese economy is limiting the advancement of the Bovespa Index, on a day with an empty agenda of indicators. With this and amid doubts about the period in which interest rates will be high, especially in advanced economies, investors’ focus is on the participation of Central Bank directors in events and the speech by the president of the Federal Reserve (Fed), Jerome Powell.

Despite weak inflation data from China, iron ore rose 1.79% in Dalian, with markets paying attention to possible stimulus measures for the country. This encourages the appreciation of shares in the metal segment, especially Vale (VALE3). Petrobras advances above 1.00%. The state-owned company is expected to present a solid result in the third quarter, influenced by production records and the rise in Brent oil, a reference for Petrobras.

In addition to the balance sheets, the focus at B3 is Braskem’s confirmation that Abu Dhabi’s state-owned oil company, Adnoc, presented a new proposal for the Brazilian company. At 10:50 am, the Ibovespa rose 0.33%, to 119,570.54 points, after opening at 119,180.45 points (also the minimum) and before the maximum at 119,779.14 points, when it advanced 0.51%.

At 11:46 am, the Ibovespa rose 0.84%, to 120,167.83 points, compared to a maximum of 120,189.50 points, when it advanced 0.85%. The dollar in cash dropped to R$4.89 and future interest rates fell.