25 May 2024

UPDATE: Brazil’s Bovespa

Daily News
| The European |

Brazilian stocks plunged 51% in the January-March period measured in dollar terms, making the benchmark Bovespa index the world’s worst-performing major equity market in the first quarter, according to Reuters/Refinitiv calculations. 

The extraordinary fall was down to a double-whammy of heavy selling, along with markets around the world as the hit to growth and earnings from coronavirus became apparent, and a 22% fall in the real’s exchange rate. 

The collapse in oil prices also played a part in the Bovespa’s performance, as preferred shares in oil giant Petrobras sank 56% in the first quarter. And that was in local currency terms. 

In local currency terms, the benchmark Bovespa index closed the month of March down 30%, the biggest monthly fall since August 1998. It fell 37% over the first quarter period, its steepest quarterly plunge since at least 1994. 

The second-biggest declining equity market was Argentina’s, which fell 46% in dollar terms, followed by Greece, according to Reuters/Refinitiv calculations. 

The Bovespa closed 2.1% lower on Tuesday at 73,086 points. 

The real, supported by a $755 million sale of spot market dollars at auction by the central bank, closed at 5.1950 per dollar, meaning it depreciated by 22.5% in the first quarter of the year. 

That marks the currency’s biggest quarterly fall since 2002, and there might be even further to go. 

“In a worst-case scenario where current account funding dries up for a long time, most deficit currencies still have major downside,” Bank of America Merrill Lynch analysts wrote in a note on Tuesday. 

“For example, the Brazilian real … would need to be another 20% cheaper to balance (the) current account,” they said. 

The central bank has now sold over $12 billion in spot market intervention currency auctions so far this year, and has also sold dollars via FX swaps and credit line auctions. 


Reported by Jamie McGeever 

Sourced Reuters 

For more Banking & Finance and Daily news follow The European Magazine 

Sign Up

For the latest news

Magazine Hard Copy Subscription

Get your
favourite magazine
delivered directly
to you


Digital Edition

Get every edition delivered
directly into your email inbox


Download the App free today

your favourite
business magazine
while on the go.
Available on

Other Daily News Articles You May Like

Website Design Canterbury