BRAZIL: Ibovespa Falls For The Second Day Amid Fears About Pension Reform

(RTTNews) - Ibovespa, the benchmark stock market index in Brazil, closed down for the second consecutive trading session, receding 1.05% Friday to 72,165.64 points amid fears that the pension reform bill would not be approved shortly due to the domestic political turmoil.

Uncertainties regarding a tax reform in the United States also weighed on the Brazilian stock market. Ibovespa had a weekly loss of 2.37%.

"If anyone was waiting for a moment to sell, that moment has come," said Codepe Corretora's economist José Costa. According to him, the political strength of President Michel Temer diminished after lawmakers shielded him from a second criminal complaint.

Besides that, the inner conflict in PSDB, one of the prominent parties in the federal government coalition, regarding its support to Temer, cooled expectations on the approval of the pension reform bill.

BRF shares (-4.02%) were among the highlights Friday, sinking in spite of the company's larger-than-expected net profit in the third quarter. According to analysts, the food processing company's delays and difficulties in choosing a new global president have weighed negatively, with conflicts between shareholders becoming evident. There is also concern about a rise in grain prices following remarks during a conference call.

The shares of Rumo (-5.49%), Ultrapar (-3.30%) and Banco do Brasil (-2.45%) also posted heavy losses.

Meanwhile, in another volatile trading day, the locally traded U.S. dollar gained strength and closed up 0.61%, at R$ 3.281. With no news on the factors that have driven the exchange rate - notably the pension reform in Brazil and the tax reform in the United States - investors were cautious and intensified adjustments.

For the next week, the pension reform in Brazil and the tax reform in the United States should remain on the radar, in addition to expected major companies quarterly results on the domestic scene, such as Petrobras, which is scheduled to be released after the close of Monday's trading session.