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Brazilian stock index tops 100,000 points for first time
[RIO DE JANEIRO] Brazilian stocks topped 100,000 points for the first time Monday, on hopes for progress in President Jair Bolsonaro's promised pro-market reforms.
The Ibovespa, the country's main index in Sao Paulo, hit an intra-day record of 100,037.69 before closing at its highest level ever of 99,993.93, up 0.86 per cent from the previous trading session.
Shares have increased by more than 13 percent since Mr Bolsonaro took power on January 1, breaking a dozen records in the first month of his administration, as investors bet on the far-right leader fulfilling his pledges to get Brazil's finances in order.
The new high coincides with Mr Bolsonaro's visit to Washington where he will meet with his US counterpart Donald Trump.
The tough-talking president has long expressed his admiration for Mr Trump, sharing the US leader's dislike of multilateral organisations and leftist politics, while promoting businesses over environmental concerns at home.
It also comes after Friday's successful auction of concessions to 12 regional airports across Brazil that was seen as the first major test of foreign investor confidence in the Mr Bolsonaro's market-friendly agenda.
Spain's Aena snapped up six airports while Flughafen Zurich of Switzerland bought rights to two.
Brazilian consortium Aeroeste picked up four airports.
Ultraconservative Bolsonaro has made privatising state-owned companies and overhauling the costly pension system key planks of his policy to reduce soaring public debt and regain investor faith in Latin America's largest economy.
Friday's auction was also seen as a test of the market's support for Mr Bolsonaro's economy minister Paulo Guedes, a US-trained free-marketeer.
Mr Guedes is spearheading the government's policy to inject pro-business vigor into an economy still bearing the scars of a record-breaking 2015-2016 recession.
But the lack of any detail or progress has disappointed investors.
Alex Agostini, of the consultancy Austin Rating, said Brazil's still weak economic growth "increases the bet" on an interest rate cut this year, which would draw money to the stock market.
Brazil's central bank will hold its first rates meeting on Tuesday and Wednesday under its new chief, Roberto Campos Neto.