Ibovespa Underperforms Major Equity Markets

The Ibovespa lost nearly 1% to trade below 176,500 on Friday amid losses for major energy producers and banks. US Secretary of State Marco Rubio said on Thursday that there had been “some positive signs” in negotiations, although disagreements remained over Tehran’s uranium stockpile and control of the Strait of Hormuz. Investors remained concerned about disruptions around the Strait of Hormuz, which have driven oil prices sharply higher since the start of the conflict and shifted global interest rate expectations amid inflation concerns. However, Petrobras fell nearly 2%. Utilities also traded lower, with Axia and Sabesp down more than 1%. Other laggards included Ambev (-1%) and Rede D'Or (-1%). Also, Santander and Itausa lost more than 1%.

The Ibovespa gained 0.2% to close at 177,650 on Thursday on hopes of an Iran-US peace deal. Oil prices retreated amid signs of a possible diplomatic breakthrough in the Middle East conflict. Reports indicated that the US and Iran had reached an agreement through Pakistani mediation, while US Secretary of State Marco Rubio said there were “some good signs” that a deal to end the war in Iran could be in sight. Financial stocks advanced as easing energy pressures supported sentiment, with Itaú up 1.1% and Bradesco adding 0.5%. Vale rose 0.8%, reversing earlier losses despite lower iron ore prices. Petrobras gained 0.8% even as oil prices moved lower abroad, after the company joined the federal government’s subsidy program for petroleum-based fuel producers and importers. Steelmakers also outperformed, with CSN rising 3.4% on a stronger industry outlook and Usiminas up 2% after a Goldman Sachs upgrade. In contrast, Minerva dropped 5.4% after Itaú BBA downgraded the stock.

The Ibovespa fell nearly 1% to trade below 176,500 on Thursday as investors assessed renewed tensions between the US and Iran. Iranian leader Mojtaba Khamenei reportedly ordered that the country’s near weapons-grade uranium should not be shipped abroad, despite US President Donald Trump having assured Israeli allies that Iran’s enriched uranium stockpile would leave the country under any peace agreement. Oil prices rebounded, reviving concerns that a war-driven energy shock could lift inflation and keep interest rates elevated for longer. Banking shares traded lower, with Itaú down more than 1% and Bradesco losing nearly 1%. Vale slipped close to 1% on weaker iron ore prices, while Petrobras gained over 1% alongside the oil rally. Meanwhile, Itaú BBA downgraded Minerva (-5.6%) to “market perform” from “buy” and cut its target price, while Goldman Sachs upgraded Usiminas (+3%) to “buy,” naming it its top steel pick in Brazil.