Ibovespa Drops on Inflation Surge

The Ibovespa fell nearly 1% to trade below 189,500 on Friday, pressured by February’s mid-month inflation reading that came in well above expectations. The IPCA-15 rose 0.84%, driven by higher education and transport costs, reducing bets on deeper Selic rate cuts and lifting interbank deposit rates. Major banks traded mixed, Itaú and Banco do Brasil each lost over 1%, while Bradesco gained about 2% after its CEO said new healthcare operations could reach R$50 billion in market value. Meanwhile, Axia slid over 3% on a 37% year-on-year profit decline. In addition, Petrobras gained nearly 1% on higher oil prices.

The Ibovespa pulled back for a second session to close 0.1% lower at 191,005 on Thursday amid pressure from commodity giants. Petrobras pared losses after oil prices swung higher with Iran's pledge to show flexibility in nuclear talks and OPEC+'s potential output increase. Meanwhile, Vale was down more than 0.9% on signs of muted demand from China, among its largest consumers. WEG also posted losses, falling 2% after being downgraded to from overweight to neutral by JPMorgan following downwardly revised EPS forecasts. Still, banks were mostly higher with support from a sharper than expected deflation rate in the IGP-M gauge, consolidating bets of multiple rate cuts by the BCB this year and improving the credit outlook.

The Ibovespa edged down to close at 191,247 on Wednesday easing from all-time highs as higher oil and iron ores quotes boosted Petrobras and Vale. Oil prices rose amid lingering concerns over a potential US-Iran military conflict, lifting Petrobras 0.3%. Likewise, Vale gained more than 2.6%. In contrast, WEG lost 2.2% after it reported a net profit of R$1.59 billion in the fourth quarter of last year, a 6.3% decline compared to the same period a year earlier.