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Brazil

Bovespa loses R $ 78.9 billion in market value in a day of chaos

Investing.com - The chaos that settled in the financial market, with the biggest drop in intraday since Joesley Day, evaporated $ 78.9 billion from the São Paulo stock exchange on Thursday. The amount exceeds the market value of Banco do Brasil, which is R $ 74 billion.

The result was only worse because, in the final stretch of the trading session, the  stock market  recovered and  ended the session  with losses of -2.98% to 73,851 points, the lowest level since December 20. The volume reached R $ 20.4 billion, 73% above the average of the year, with stop-loss and repurchases.

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At the worst moment of the day, panic and sequential stop-loss activation knocked the index down to a low of 71,161 points, losses of -6.5% from yesterday's close to 76,117 points. This was the biggest negative movement in the intraday since May 18, 2017, the day after the leak of the conversation between Michel Temer and Joesley Batista, which triggered the circuit breakeractivation   after the Ibovespa broke -10%.

According to a survey conducted by  Economática  at the request of  Investing.com Brazil , the market value of the 60 companies listed on the Ibovespa fell by R $ 65.8 billion.

The losses were led by Vale (SA: VALE3 ), which fell 3% in a correction movement after rising by almost 11% in the month. The mining company's market value fell by R $ 8.836 billion to R $ 282.584 billion, the second most valuable Ibovespa company.

Ambev (SA: ABEV3 ) and Petrobras (SA: PETR4 ) were second and third in losses, respectively, with a decrease of R $ 7.07 billion and R $ 5.80 billion in market value. Santander (SA: SANB11 ), which sank 5.4% in the trading session, and Itaú Unibanco (SA: ITUB4 ), -2.9%, with a decrease of R $ 5.45 billion and R $ 5.07 billion, in that order.

Abroad, the MSCI Emerging Markets Index (NYSE: EEM ) closed almost stable. The stock index IShares MSCI Brazil (NYSE: EWZ), traded in the United States, yielded 5.1%.

The  dollar  reached R $ 3.96 in the morning, before retreating to R $ 3.93 at closing. Central Bank President Ilan Goldfajn gave a press conference to calm the market and announced that it  could put $ 20 billion  by next week and signaled that it could use international reserves of $ 382 billion.

In interest rates rates have advanced strongly with the market's belief that the central bank will need to raise interest rates to contain the dollar's impact on inflation. The DI contract for January 2019 closed the trading session with a yield of 7.60%, indicating the Selic increase. In January 2020, the market trades DI to 8.85, up 0.59 pp.

For January of 2020 the rate rose to 8.85%, against 8.26% yesterday. On the other hand, the longest interest rate for 2025 fell sharply from 12.40% to 12.13% a year after the Central Bank made auctions for the repurchase of public bonds, alleviating the pressure of long futures markets. The 10-year interest rate for January 2028 fell from 12.67% to 12.51% per year.

See below the biggest losses of market value on Thursday:

Company	Market value (R $ billion)	Losses in 7/6 (R $ billion)
Vale (SA: VALE3 )	282.58	-8.84
Ambev (SA: ABEV3 )	299.89	-7.07
Petrobras (SA: PETR4 )	229.10	-5.80
Santander (SA: SANB11 )	119.65	-5.45
Itau Unibanco (SA: ITUB4 )	251.95	-5.07
Bradesco (SA: BBDC4 )	176.32	-3.38
Banco do Brasil (SA: BBAS3 )	74.00	-3.09
B3 (SA: B3SA3 )	40.84	-2.88
Braskem (SA: BRKM5 )	34.15	-1.50
Magazine Luiza (SA: MGLU3 )	20.11	-1.50
Gerdau (SA: GGBR4 )	23.12	-1,47
Eletrobras (SA: ELET3 )	18.66	-1.22
Weg (SA: WEGE3 )	34,45	-1.19
BB Security (SA: BBSE3 )	50.43	-1.17
Rumo (SA: RAIL3 )	19.96	-0.98

With Reuters

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