Ibovespa Edges Lower Following Election Poll

The Ibovespa fell 0.2% to close at 171,689 on Wednesday as investors reacted to a new presidential election poll and fresh manufacturing data. An AtlasIntel/Bloomberg survey showed President Lula holding a 6.5-point lead over Flávio Bolsonaro in a hypothetical runoff, reinforcing expectations of a fiscally looser policy stance. Financial stocks were among the main drags, with Bradesco down 0.2% and Banco do Brasil losing 0.9%. WEG fell 1.4% and Ambev retreated 0.5% after the latest S&P Global manufacturing PMI showed a return to expansion, though the improvement was mainly driven by hiring and stockpiling while output and new orders remained in contraction. Utilities also traded lower, with Axia down 0.7%, while Engie plunged 6.1% after announcing the resignation of Pierre Jean Bernard Guiollot from its board of directors.

The Ibovespa fell nearly 1% to trade above 170,000 on Wednesday as investors reacted to a new presidential election poll and remained cautious ahead of key US labor market data. A new AtlasIntel/Bloomberg survey showed President Lula holding a 6.5-point lead over Flávio Bolsonaro in a hypothetical runoff, backing the outlook of a government that is fiscally dovish. Financial stocks led losses, with Itaú and Bradesco down nearly 1%, while utilities also weakened, with Axia falling close to 2%. Petrobras shed nearly 1% as oil prices remained near pre-conflict levels. Vale also lost close to 1% as iron ore prices declined after new EU steel import barriers raised concerns over weaker demand for steelmaking raw materials. Steelmakers also fell, with Gerdau down over 1%.

The Ibovespa fell 0.7% to close at 172,024 on Tuesday as investors reduced risk at the end of the first half and assessed weaker fiscal and labor market data. Gross public debt rose above forecasts in May, while primary deficit was wider-than-expected. Gross debt reached 81.1% of GDP, above market expectations of 80.7%, the primary deficit totaled R$56.1 billion, exceeding forecasts of a R$53.5 billion shortfall. The deterioration in fiscal accounts reinforced concerns over higher borrowing costs and persistent pressure on interest rates. Meanwhile, formal job creation also missed expectations, with around 73,000 new positions created in May, below forecasts of 115,000. Losses were broad-based across the index. In the banking sector, Banco do Brasil fell 1.7% and Itaú lost 0.5%. Utilities also traded mostly lower, with Axia down 1.3%. Petrobras dropped 0.9% as oil prices tumbled to their lowest levels since 2020, while Braskem shed 4.3% after being downgraded by JPMorgan and Citi.