“Ações domésticas boas devem cair 20-30%”. Gestores preveem segunda caótica

The domestic stocks are projected to fall between 20 to 30% on Monday following Brazil's economic victory for Lula, according to fund managers. "Good domestic stocks, such as shopping centers and energy companies, should see a decline of around 20 to 30%," said one fund manager. "Vendors, 60%. Banks, 15%," another fund manager added.

"At first, there's no buyer. Perhaps a foreign one, but it will be a very difficult day," said a second fund manager. Many had increased exposure to interest-sensitive stocks in recent days, hoping to capture a potential rally should Flávio Bolsonaro win. However, with the race still tight, there was still room for more positions to be added, and part of the portfolio was protected through options.

Tonight, Bradesco BBI lowered its recommendation on Brazilian stocks from overweight to neutral, citing that further gains will depend on progress in the economic and fiscal agenda and corporate results. With no marginal buyer in sight, the expectation is that the circuit breaker will be activated on Monday. This occurs when the Ibovespa falls by 10% from the previous day's close, in which case trading in stocks, derivatives, and private fixed income is halted for 30 minutes.

The market reopens after these 30 minutes, but if there is a further fall of 15% from the previous day, the auction is halted for an hour. After that, if there is a depreciation of 20%, B3 determines the duration of the trading halt. Another adjustment will occur through currency exchange. The futures contract of the Brazilian real on the CME in Chicago pointed to a dollar of R$ 5.50.

In the case of interest rates, most fund managers predicted an opening above 100 basis points for the DI rate in January 2029 if Lula were elected, according to a Citi survey published on Friday.