Brazil’s stock market plunges after corruption claims

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Brazil’s Bovespa stock market was briefly halted as investors reacted to corruption allegations against Brazilian President Michel Temer.

Stocks plunged more than 10% at the start of trading, prompting circuit breakers to kick in as well as halt dealings.

President Temer was forced to deny a newspaper report in which he had given consent to paying off a witness in a huge corruption scandal.

Investors are concerned in which Mr Temer’s reform plans could be derailed.

Mr Temer is actually trying to get pension reforms through Congress in which could mean men could have a minimum retirement age of 65, as well as women 62, as well as most people could contribute more. There is actually currently no minimum retirement age.

There are also labour reforms on the cards to weaken trade union bargaining powers as well as make hiring as well as firing workers easier.

Optimism turns sour, by Daniel Gallas, BBC South America business correspondent

“I’ve never seen anything like This particular”, said one trader with decades of experience.

Trading was delayed in Sao Paulo’s stock exchange as well as once This particular opened, the circuit breaker stopped all operations within just a few minutes. in which has not happened since the global financial crisis of 2008.

In a fortnight Mr Temer was about to start pushing his economic reform plan through Congress.

Until Tuesday markets were very optimistic – however at This particular point many don’t see how Mr Temer can keep his job if the allegations about a tape in which he condones a bribe payment are true.

What happens next? If Mr Temer keeps his job, he will need a Herculean effort to get Congress behind him again. If not, the Brazilian Congress will have to chose a completely new president indirectly.

Getting reforms approved is actually no longer a top priority for a country still in deep crisis.

On Wednesday night, the O Globo newspaper reported in which Mr Temer had been recorded discussing payments to silence former House Speaker Eduardo Cunha.

Mr Temer’s office said he had never requested payments to Mr Cunha, as well as called for a full investigation into the allegations.

Two MPs have filed impeachment proceedings against the president.

as well as on Thursday senator Aecio Neves, an important ally also accused inside the tape recording, was suspended coming from Congress as well as had his house raided by the police.

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Media captionHundreds of protesters gathered in Sao Paulo calling for the impeachment of President Michel Temer

Mr Cunha was jailed for 15 years in March for corruption, money laundering as well as tax evasion, as part of a major investigation dubbed Operation Car Wash.

The probe, launched in March 2014, centres on companies in which were offered deals with state oil giant Petrobras in exchange for bribes, which were funnelled into politicians’ pockets as well as political party slush funds.

Almost a third of Mr Temer’s cabinet is actually under investigation for alleged corruption.

Mr Temer played a key role inside the impeachment proceedings against his predecessor, President Dilma Rousseff, last year.

She was removed coming from office accused of illegally manipulating government accounts. She denies all the charges.

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