Ibovespa Falls on Growth Concerns and Political Risks

The Ibovespa rose about 1% to near the 197,000 mark on Friday, a new historical record, as optimism grew for a pause in Middle East hostilities and potential reopening of the Strait of Hormuz. Oil prices seesawed as Pakistan prepares to host Iranian and US delegations, while Israel and Lebanon are slated to meet in Washington next week, lifting financial stocks on hopes of de-escalation despite energy-driven inflation. Brazil’s annual inflation rose to 4.14% in March 2026 from 3.81% in February, mostly due to higher vehicle fuel prices which lifted transport costs. Itaú was up 0.5% Bradesco gained nearly 1%, utilities rose with Axia up 1% and Sabesp 3%, while WEG added near 1%, Rede D’Or climbed 1.7%, and Ambev rose 1%.

The Ibovespa rose 1% to a record 194,000, lifted by gains across energy, utilities, and major banks. Oil prices surged amid Strait of Hormuz uncertainty, boosting Petrobras and PRIO, both up over 3%, while Sabesp gained 3% on its 31.6% investment hike this year. Major banks also contributed to the rally as investors expect the US-Iran conflict to not escalate much further as it was previously believed, easing stagflation fears. Itaú gained 0.5% and Banco do Brasil near 1%. JPMorgan and Morgan Stanley’s positive assessments reinforced confidence. JPMorgan highlights Brazil’s higher beta as higher commodity prices improve the outlook for inflows, while Morgan Stanley maintains an overweight stance, citing Brazilian equities as core holdings in its Latin American portfolio. Both brokers see strong energy-sector potential, Morgan Stanley holds Petrobras as its largest Latin American position, and JPMorgan flags it and PRIO as beneficiaries of tighter global supply.

The Ibovespa soared over 2% to trade above 193,000 on Wednesday on news of a two-week ceasefire in the US-Iran war. Oil prices fell amid expectations of restored oil and gas flows through the Strait of Hormuz. The development eased concerns that an energy shock would magnify inflation and force the central bank to maintain restrictive rates, supporting the stock outlook. Lower bond yields reduced credit concerns and supported financial stocks, while lower oil prices pressured energy producers. Bradesco surged nearly 6%, while Itaú and Banco do Brasil each gained about 5%. Also, Vale advanced over 3% despite lower iron ore prices, WEG rose 3.6% and Rede D'Or gained 4.8%. In contrast, Petrobras lost nearly 1%.