Ibovespa Falls on Banking and Energy Losses

The Ibovespa fell 1% to close at 176,210 on Friday, pressured by losses in major banks and energy producers. The banking sector continued to weaken after months of strong gains in the stock market. Aside from Banco do Brasil, which rose 0.6%, major lenders closed sharply lower, with Bradesco down 1.6%, Itaú Unibanco losing 1.7%, and Santander Brasil falling 1.8%. Weakness in financials also weighed on B3, which dropped 2.1%. Petrobras shed 1% amid volatile oil prices, while junior oil companies traded mixed, with Prio up 0.6% and Brava Energia down 1.8%. Vale gained 0.6% despite iron ore posting a weekly loss. Investors also assessed a new election poll showing President Lula opening a nine-point lead in the first round following controversy involving Flávio Bolsonaro and former Banco Master owner Daniel Vorcaro, who faces fraud charges. Markets now await next week’s key economic releases, including Brazil’s first-quarter GDP data.

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.