BRAZIL: Ibovespa Closes Almost Stable After U.S. Tax On Steel Imports

(RTTNews) - After a volatile trading session, the Ibovespa closed practically stable, with a 0.03% increase, at 85,377.79 points, after U.S. President Donald Trump announced import tariffs on steel and aluminum as of next week.

Trump said the American government would impose tariffs of 25% on steel and 10% on aluminum imported by the country and that those duties would remain in force "over a long period." That caused the U.S. stock markets to close with heavy losses. There are fears that other countries may retaliate. The European Union (EU), for example, condemned the decision and stated that it should prepare a response to the World Trade Organization (WTO).

There are still no details on which countries will be affected, but a report by the U.S. Department of Commerce had already indicated Brazil as one of the countries to be taxed. Shares of Brazilian were impacted, with Usiminas (-4.22) and CSN (-4.43%) among the biggest losses on the Ibovespa.

Meanwhile, Gerdau's shares (+3.19%) advanced and were among the most traded, since the steelmaker has operations in the United States, where much of its revenue comes from, and could benefit from the measure.

The shares of banks such as Itaú Unibanco (+1.45%) and Ambev (+1.55%) also prevented losses on the Ibovespa, reflecting positive financial data released by the company.

According to Codepe Corretora economist Jose Costa, the Ibovespa resisted well the strong drop in U.S. stock markets also due to foreign investors. He believes that "the market is still bought." However, he does not rule out that March may bring more volatility to the index.

The locally traded U.S. dollar rose against the Brazilian real and several other currencies, boosted by the U.S. government's decision to tax steel and aluminum imports. The news outweighed the negative pressure coming from less austere remarks by the U.S. central bank chairman Jerome Powell about the country's upward path of interest rates. The greenback rose 0.36%, quoted at R$ 3.256.