Brazilian stocks plunged more than 3 percent on Monday on President Luiz Inácio Lula da Silva’s first working day, led by a sell-off in shares of state oil company Petrobras.
A day after the veteran leftist took office for a four-year term, replacing far-right President Jair Bolsonaro, the Sao Paulo stock market’s Ibovespa index fell 3.25 percent in trading on the afternoon.
Petrobras was among the biggest losers, with preferred shares falling 6.6 percent and common shares falling 5.71 percent.
Analysts say investors are concerned about signs of increased government intervention in the economy under Lula, who previously led Brazil from 2003 to 2010.
Petrobras is especially in the spotlight after Lula extended federal fuel tax cuts and promised to change the company’s pricing policy.
“The market reading is that there will be more and more interference in state companies, after a period of more free market policies” under Bolsonaro, said financial analyst Gilberto Braga of the Ibmec research university.
Lula’s pick for Petrobras chief executive, Senator Jean Paul Prates, said on Friday he wanted to change the company’s pricing policy, which currently links what consumers pay for fuel to global prices.
Lula, who has also said he is in favor of a price policy review, added to market jitters on Monday when he rejected plans launched by Bolsonaro to privatize eight state-owned companies, including Petrobras.
During his campaign, the 77-year-old former union leader criticized privatizations of state-owned companies and said he would stop such liquidations if elected.
© Agence France-Presse
