S\u00e3o Paulo \u2013 The S\u00e3o Paulo Stock Exchange (Bovespa, in the Portuguese acronym) closed on a sharp down note this Monday (8th). It was the first day of trading after risk rating agency Standard & Poor\u2019s downgraded the United States\u2019 debt rating. Ibovespa, the main Brazilian stock market index, dropped by 8.08%, to reach 48,668 points.<\/p>\n
It was the highest drop since 2008, when the world was shaken by the United States mortgage crisis. Throughout the day, the Ibovespa dropped by as much as 9.73%, following the trend of the leading stock exchanges worldwide. The Dow Jones index, of the New York Stock Exchange, closed down 5.55%. The London Stock Exchange\u2019s FTSE 100 ended the day on a drop of 3.39%.<\/p>\n
To economists heard by Ag\u00eancia Brasil<\/i>, however, the Brazilian bourse\u2019s reaction to the news of the fiscal situation of the US and Europe was \u201cexaggerated.\u201d They believe that the sharp decline has \u201cemotional\u201d causes and should therefore be reversed. <\/p>\n
\u201cThe decline witnessed today was more emotional than it was rational,\u201d said Keyler Carvalho Rocha, a professor at the School of Economics, Administration and Accounting of the University of S\u00e3o Paulo (FEA-USP). \u201cThe market will tend to recover.\u201d<\/p>\n
According to the professor, the economic scenario in countries such as Greece, Italy and Portugal is delicate. The terms of the agreement to raise the United States debt ceiling were also less than ideal. These, nevertheless, do not justify such a pronounced drop in the Ibovespa. \u201cPetrobras\u2019 stock dropped by roughly 30% this year, but the company is healthy, posting profits,\u201d the professor explained. \u201cThe price is unreal. It should go up in the long run.\u201d<\/p>\n
Alcides Leite, a professor at Trevisan Business School, also believes that the Ibovespa decline today was \u201cexaggerated\u201d and bears a \u201cstrong emotional component.\u201d According to him, however, there is no telling whether an even sharper decline may still take place, or when will a bullish trend be recorded again. Still, he acknowledged that the lowering of the US\u2019 debt rating \u201cwas historical\u201d and that \u201cthe repercussion of this event on the market is strong.\u201d<\/p>\n
In this situation, Leite advises patience to those who have funds invested in stock. To those who have cash available and are considering investing to earn profits in the long run, Leite stated that the stock exchange is a good choice. \u201cInvesting is recommended to those who can wait at least two years.\u201d<\/p>\n
The decline in stock exchanges around the world has also impacted on the exchange rate. The commercial dollar exchange rate increased by 1.96%, at 1.61 real per dollar. The euro exchange rate increased by 2.35%, at 2.30 real per euro.<\/p>\n
*Translated by Gabriel Pomerancblum<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"
The main index of the S\u00e3o Paulo Stock Exchange (Bovespa) closed down 8.08% this Monday. Analysts claim that there has been an \u2018emotional\u2019 reaction to the US\u2019 debt rating downgrade.<\/p>\n","protected":false},"author":2315,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[91],"tags":[],"class_list":{"0":"post-38935","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-economy"},"wps_subtitle":"The main index of the S\u00e3o Paulo Stock Exchange (Bovespa) closed down 8.08% this Monday. Analysts claim that there has been an \u2018emotional\u2019 reaction to the US\u2019 debt rating downgrade.","_links":{"self":[{"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/posts\/38935","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/users\/2315"}],"replies":[{"embeddable":true,"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/comments?post=38935"}],"version-history":[{"count":0,"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/posts\/38935\/revisions"}],"wp:attachment":[{"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/media?parent=38935"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/categories?post=38935"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/tags?post=38935"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}