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Minus 2.83%: Brazilian Stocks Fall for a Second Day

São Paulo’s Stock Exchange (Bovespa) continued on Thursday the decline it had started the previous day. Investors seemed to react to reform plans proposed by US President Barack Obama and 482,000 new applications for unemployment insurance in the United States.

The Ibovespa, Bovespa’s index fell 2.83%, to 66,270 points, in a financial volume of 7.6 billion reais (US$ 4.2 billion). It was the biggest one-day drop in the last two months.

The dollar on the other hand ended up 0.45% higher at 1.801 reais. Since September 24, 2009, the dollar had not exceeded 1.80 reais.

Brazil’s exchange flow, the sum of dollar inflow and outflow in the country, was positive by US$ 816 million up until last Monday, January 18, as informed today by the head of the Economics Department of the Brazilian Central Bank (BC), Altamir Lopes.

Usually, the BC discloses each Wednesday the exchange flow for the previous week, which would end on the 15th, but today, upon announcing the Foreign Sector Report concerning December, Lopes provided more up-to-date figures.

As of Friday, January 15, the surplus was US$ 95 million. The exchange flow improved significantly on Monday, due to investment in bonds, by Brazilians and foreigners, fixed income and remittances of profits and dividends – which generated US$ 1.687 billion. On the other hand, the trade flow showed a deficit of US$ 871 million.

Lopes also stated that the BC purchased US$ 1.279 billion in the spot market and received US$ 141 million in foreign currency loans up until the 18th.

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