Brazilian stocks fell more than three percent on President Luiz Inacio Lula da Silva’s first day in office Monday, led by a selloff of shares in state oil company Petrobras.
A day after the leftist veteran took office for four years, replacing far-right president Jair Bolsonaro, the Sao Paulo stock exchange’s Ibovespa index fell 3.25 percent in afternoon trade.
Petrobras was one of the biggest losers, with its preferred shares down 6.6 percent and its common stock down 5.71 percent.
Analysts say investors are worried about signs of government intervention in the economy under Lula, who previously led Brazil from 2003 to 2010.
Petrobras was particularly in the spotlight, after Lula extended federal fuel tax cuts and vowed to change the company’s pricing policy.
“The market reading is that there will be more intervention in state companies, after some time of creating a free market policy” under Bolsonaro, said financial analyst Gilberto Braga of the Ibmec research university.
Lula’s pick for chief executive in Petrobras, Senator Jean Paul Prates, said there wanted to change the company’s pricing policy, which currently pegs what consumers pay for fuel to global prices.
Lula, who has also said he favors an overhaul of pricing policy, added to the market on Monday when he rejected a plan launched by Bolsonaro to privatize eight state companies, including Petrobras.
During the campaign, the 77-year-old former union leader criticized the privatization of state-owned enterprises and said he would stop selling them if elected.
© Agence France-Presse