RIO DE JANEIRO, BRAZIL – Ibovespa stock index closed sharply down on Wednesday, with concerns over the behavior of U.S. inflation and its impact on the Federal Reserve’s next steps.
A series of results also drew attention, with the end of the day reserved for another heavy agenda, including the figures for Suzano (SUZB3), Natura&Co (NATU3), Via Varejo (VVAR3) and MRV (MRVE3).
The benchmark Brazilian stock market index, Ibovespa fell 2.65%, to 119,710 points, the highest daily percentage slump since March 8, when it lost almost 4% after STF Justice Edson Fachin overturned all convictions imposed on ex-president Luiz Inácio Lula da Silva within the scope of the Lava Jato operation.
Financial volume on Wednesday totaled R$45.68 (US$8.6) billion, with the trading session also marked by the expiration of options on Ibovespa.
The drop comes after Ibovespa hit 123,000 points the day before, renewing its highest closing since January, a month in which it hit historic highs – of 125,323 points for the intraday and 125,076 points at the close, both on January 8.
In the United States, the S&P 500 slipped back 2.14% and the Nasdaq Composite lost 2.67% after a higher-than-expected rise in U.S. consumer prices stoked fears of earlier-than-expected withdrawal of monetary stimulus.
The U.S. consumer price index rose 0.8% in April after advancing 0.6% in March, the Labor Department said on Wednesday. Economists had projected a 0.2% rise.
According to the president of independent analysis website Ohmresearch, Roberto Attuch, the big test for the markets is the North American inflation and the debate that should occur is whether it reflects temporary or more permanent factors.
However, he pointed out that in order to have a final verdict on inflation, it is essential to wait for the figures in June and July, when the calendar effect should normalize and several production chains will be re-established.