Fiscal fear dominates trading session and presses Ibovespa

Dollar loudly oscillated during the day, reflecting market discomfort with the absence of structural measures in Haddad’s fiscal plan

Brazilian financial and currency markets closed Monday (9) amid instability, reflecting the reactions to the new fiscal agreement announced by the federal government on Sunday (8). The dollar retreated 0.14%, quoted at $ 5.56, after floating during the day and exceeds $ 5.60. Ibovespa, the main index of B3, closed with a drop of 0.30% at 135,699 points, after negatively oscillating more than 1.46% at the beginning of the session.

Also read: dollar oscillates and scholarship retreats after announcement of the new IOF

The movement was directly driven by the disclosure of the coordinated fiscal package between the Ministry of Finance and the National Congress, which replaces the increase in IOF with a series of collection measures. Among the main changes is the taxation of financial instruments previously exempt from income tax, such as LCIs, LCAs, Cris, CRAS and Encouraged Debentures. The news took the financial and real estate sector by surprise, which led the losses in the stock market.

Government strategy has generated critical reactions between analysts and investors, which point to the absence of a structural spending reduction plan as the largest point of concern. For Alexsandro Nishimura, economist at Nomos, the government wasted an opportunity to show commitment to deeper adjustments:

“The government has lost another chance to present a minimally structuring fiscal plan. The replacement of the increase in IOF with short -term collections does not respond to the main criticism of the market, which is the lack of spending cuts.”

Arthur Barbosa, from Aware Investments, also highlighted the risks to public accounts: “The measures remain concentrated in increasing revenue, without advances in the control of expenses. This intensifies doubts about compliance with the 2025 tax target.” The Focus Bulletin released on Monday already projects a primary deficit of -0.60% of GDP, well above the tolerable limit established in -0.25%.

In the corporate scenario, banks and companies linked to the real estate sector were the greatest impaired with the tax change. On the other hand, some actions resisted the negative climate, such as Gerdau, favored by positive analysis from abroad.

Meanwhile, external factors also influenced investor behavior. Conversations between the United States and China have not brought concrete advances, and recent data suggest the deceleration of the Chinese economy, affecting iron ore prices and limiting the appreciation of the real against the dollar.

For the coming days, analysts warn that market frustration can impact central bank decisions. If the pressure on public accounts intensifies, a revision in monetary policy is not ruled out, with the possibility of increasing Selic – something that had been given as unlikely so far.

Investors are aware of the discussions in Congress and the signs that will come from the executive in the coming days, which can define the direction of the economy and trust in the business environment in Brazil.

With information from metropolis*