The Stock Exchange is going through a very complicated situation in Brazil, since the outbreak of the Coronavirus pandemic gained strong prominence worldwide.
According to a report by Portal Online Economic Value.
On Friday last week (6), the combined market value of the companies that make up the index was R$ 3.37 trillion and this Friday (13) it reached R$ 2.87 trillion
The situation in Brazil is not at all pleasant, see below for more information on how negative this will be for Brazilians.
The first circuit breaker, as the financial market interruption mechanism is known.
According to Gq, it was triggered a few minutes after the start of trading, when the main stock exchange index, the Ibovespa, fell by around 11.65%.
According to information from Valor Econômico, in March 2020 alone, stock market operations have already been interrupted four times, which is a disaster for many experts.
Stock Exchange – Urgent Measures
The circuit breaker measure was explained by consultant Zeina Latif as an attempt to contain panic in the market, interrupting the famous “herd effect”.
Which generally characterizes moments of great turmoil and uncertainty in the market — a large number of investors trying to get rid of their shares at the same time.
What are the reasons for the market’s “nervousness”?
Without a doubt, the Coronavirus. We can also ask: what implications does the stock market crash cycle have for the real economy, for those who do not necessarily invest in stocks?
How might this work in practice?
In summary:
what happens: the increase in uncertainty leads companies to postpone investment decisions, which, in turn, has an impact on employment and income”, assesses the edition of G1 this Friday.
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