Ibovespa Rises as Bank Gains Offset Commodity Losses

The Ibovespa rose 0.8% to close at 173,295 on Friday, recovering from early losses as gains in financial stocks offset declines in heavyweight commodity shares. Bond yields edged lower as oil prices returned to pre-conflict levels amid easing supply concerns, with more tankers leaving the Strait of Hormuz. This came despite President Donald Trump accusing Iran of violating the ceasefire by targeting cargo ships transiting the strait. Earlier, Iran reaffirmed its right to control shipping through the waterway and warned Gulf states against siding with the US, a day after an attack on a vessel near Oman. Major banks led gains, with Banco do Brasil up 1.4%, Bradesco rising 1.7%, Itaú climbing 1.3%, and Santander advancing 0.6%. On the downside, Vale fell 0.6% despite stronger iron ore prices, while Petrobras dropped 1.0% on lower global oil prices. Braskem plunged 8.4% after a downgrade from Citi.

The Ibovespa edged lower to trade below the 171,500 mark on Friday as investors assessed Brazil’s latest labor market data. The unemployment rate fell slightly to 5.6% in the rolling quarter ending in May, matching forecasts and holding at the lowest level in the historical series. The resilience of the labor market reinforced expectations that the BCB may keep interest rates elevated for longer. Major banks traded lower, with Itaú down more than 0.5% and Bradesco losing nearly 1%. Petrobras also fell 1% as oil prices returned to pre-conflict levels amid easing supply concerns, with more tankers leaving the Strait of Hormuz. This came despite Iran reaffirming its control over shipping in the Strait and warning Gulf states against siding with the US, a day after an attack on a vessel near Oman highlighted the fragility of the preliminary peace deal. Meanwhile, meatpackers extended gains, with MBRF rising more than 2.5%.

The Ibovespa rose 0.9% to close at 171,990 on Thursday, as investors reacted positively to softer-than-expected inflation data and fresh guidance from the BCB. Brazil’s mid-month inflation slowed more than forecast in June, while the BCB sought to clarify its latest 25 basis-point Selic cut and stressed that future decisions remain data-dependent. The softer inflation print and lower oil prices pushed the yield curve lower. Major banks traded mixed, with Banco do Brasil up 1.6%, Itaú rising 1.7%, while Bradesco edged down 0.2%. Vale rose 1.1%, recovering from recent losses. Petrobras gained 0.5% as oil prices edged up despite improving shipping flows through the Strait of Hormuz. Meanwhile, Braskem plunged 10.4% after creditors rejected its restructuring proposal.