Bovespa falls 1% with caution due to pension reform

© Reuters. Bovespa cai 1% com cautela por reforma da Previdência

The main index of the São Paulo stock market was in the red on Tuesday, with investors adopting caution in front of the government's articulations to bring Social Security reform to the House of Representatives vote next week.
At 11:49, the Ibovespa fell 1.02 percent to 72,053 points. The financial turnaround was 1.34 billion reais.
The local news about Pension reform has been the guide to business in the stock market, provoking volatility and overcoming external influences. The expectation is that this scenario will continue in the next sessions, until more clarity is given to the real support that the government has to put the measure to a vote.
Earlier, a source told Reuters that the government decided to bring forward Thursday the start of the discussion on the proposal in the plenary of the House of Representatives with the objective of having a realistic picture of the support that can count on trying to vote the text in the next week. However, still the day before, the mayor, Rodrigo Maia (DEM-RJ), said that "it is not easy" to vote the reform in the House next week.
"There is no indication of evolution in the negotiations of the Social Security and the issue of postponement of voting begins to gain a body ... The bad mood can contaminate the markets once the government's speech that everything is fine and that it has no difference vote now or in 2018 begins to lose credibility, "analysts at the brokerage Lerosa Investimentos wrote in a note to clients.
HIGHLIGHTS
- ITAÚ UNIBANCO PN (SA: ITUB4) fell 1.18 percent and BRADESCO PN (SA: BBDC4) lost 1.30 percent. SANTANDER UNIT (SA: SANB11) was down 0.62 percent and BANCO DO BRASIL ON (SA: BBAS3) yielded 0.46 percent. On the radar was the agreement with savers to settle legal disputes, which must be filed on Tuesday in the Federal Supreme Court (STF). According to one source, the agreement provides for the disbursement of a first installment of up to R $ 5 thousand for all creditors fifteen days after approval by the STF.
- ELETROBRAS ON (SA: ELET3) fell 2.24 percent and ELETROBRAS PNB (SA: ELET6) fell by 2.14 percent, among the largest Ibovespa losses, as the papers continue to show volatility amid expectations of privatization.
- PETROBRAS PN (SA: PETR4) fell by 0.26 percent and PETROBRAS ON (SA: PETR3) had a negative change of 0.38 percent against international oil prices.
- VALE ON fell 1.14 percent on the day of losses for iron ore futures contracts in China.
- KROTON ON (SA: KROT3) rose 2.24 percent, after falling in the three previous trading sessions. On the radar were statements from executives made the day before about plans for the company, which include the opening of 30 own graduation units and 150 through partnerships next year. According to analysts at Guide Investimentos, Kroton stands out among educational companies "mainly because of its strong execution power and management agility, which has managed to restructure the company in the face of economic and regulatory changes in the sector."