Brazilian stock market nears 2022 low

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São Paulo’s Ibovespa benchmark stock index was down more than 2.6 percent on Monday morning, falling to below the 103,000-point mark at 2:45 pm local time, amid caution from investors ahead of decisions on interest-rate hikes in both Brazil and the U.S.

The Central Bank’s monetary policy committee is due to meet this week to discuss changes to Brazil’s Selic benchmark interest rate, which will be announced on Wednesday. The market consensus is for a 0.50-point hike, which would raise the Selic to 13.25 percent.

Also on Wednesday, the U.S. Federal Reserve will meet to discuss interest rates. An aggressive hike is anticipated following faster-than-expected inflation in May.

The Ibovespa stock index is on track for its seventh consecutive negative session today, as Brazilian assets have been consistently tumbling since the Jair Bolsonaro government announced plans to reign in fuel prices at the pump last week.

Airlines Gol and Azul are the worst-performing shares of the trading session so far, with double-digit losses. Tourism company CVC follows close behind. The mining sector is also hurting from news that China is imposing new Covid lockdown restrictions.