Brazil stock market optimism tempered as fears grow over October vote & More News Here

* cpurl://apps.cp./cms/?pageId=stock-index-poll ballot information

BUENOS AIRES/MEXICO CITY, May 25 (Reuters) – Brazilian
shares will rise lower than beforehand anticipated this 12 months as
fears over October’s presidential vote tarnish the outlook for
the second half and double-digit rates of interest immediate a change
to deposit accounts, a Reuters ballot confirmed.

In current weeks, Brazil’s benchmark Bovespa stock index
has pared the majority of its first-quarter good points, pressured
by intensifying election rhetoric and the affect of the central
financial institution’s ultra-hawkish push to struggle inflation. It is now up 5.2%
from finish 2021 ranges.

It is anticipated to rise an extra 6.0% to 117,000 factors by
the shut of 2022 from 110,345 factors on Monday, in keeping with
the median forecast of 15 strategists polled May 12-24. That
estimate was beneath the end-2022 view of 125,000 factors returned
by the final survey in February.

“We will face brutal election instances, excessive rates of interest are
with us for the foreseeable future, and we’ve sticky inflation
across the globe,” mentioned Andre Leite, associate and senior
portfolio supervisor at Kairos Capital.

Warnings that Brazil might face comparable unrest to the 2021
U.S. Capitol riot and political instability pushed by issues
over the election’s transparency have soured the environment 5
months earlier than the presidential vote.

A gaggle of attorneys and authorized consultants mentioned final week that
Brazil’s democracy and the independence of its judiciary are
beneath menace from the federal government of president Jair Bolsonaro,
who claims the voting system is liable to fraud.

His assaults on the judiciary and Brazil’s digital voting
system have raised issues he might not settle for defeat in October
in a race by which he’s trailing his leftist rival, former
President Luiz Inacio Lula da Silva.

Brazilian shares outperformed U.S. equities within the first
quarter as commodity exports from Latin America’s greatest
economic system had been thought of oblique beneficiaries of disruptions to
international commerce attributable to Russia’s invasion of Ukraine.

But now extra traders are pulling out of the unstable
Bovespa stock index and parking their cash in safer financial institution
accounts to revenue from Brazil’s lofty charges which, at present at
12.75%, are among the many highest on this planet.

In Mexico, the S&P/BMV IPC index is forecast to realize
11.7% to 57,400 factors by year-end, from 51,376 on Monday. The
estimate was above the final survey’s name of 57,050 factors at
the shut of 2022.

“We keep optimistic, native firm earnings proceed to
recuperate from the affect of the coronavirus pandemic and Mexico’s
forex stability continues to favor international traders,”
Gerardo Copca, director at MetAnalisis, mentioned.

Mexican shares are just about flat thus far in 2022.

(Other tales from the Reuters international stock markets ballot
bundle:)
(Additional polling and reporting by Noe Torres in Mexico City;
Editing by Jan Harvey)

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