Brazil Stocks Rise on Strong Services Activity

The Ibovespa edged up to trade near the 173,000 mark on Friday as investors assessed May industrial production and June services PMI data. Services activity data showed an expansion at a slightly faster pace in June as demand improved, supporting shares linked to domestic tertiary sector activity. Rede D'Or gained nearly 1%, Raia Drogasil advanced 1.5%, while Bradesco and Banco do Brasil added about 0.5%. Also, oil prices remained near pre-conflict lows amid optimism over US-Iran peace efforts, easing concerns about energy-driven inflation and supporting financial stocks and the broader index. Meanwhile, industrial production rose just 0.2% year-on-year in May, well below forecasts of a 1.3% increase, Ambev fell nearly 1%. Investors also monitored the US decision to launch a public consultation on Brazilian trade policies and practices while awaiting trade balance data.

The Ibovespa rose 0.6% to close at 172,788 on Thursday after the release of the US payroll report, the Federal Reserve’s key gauge of labor market conditions, which came in much weaker than expected. Softer job creation reduced the likelihood of further Fed rate hikes in the coming months, improving global risk sentiment. Meanwhile, oil prices eased as the gradual normalization of shipping flows through the Strait of Hormuz raised expectations of higher supply, further easing concerns over energy-driven inflation and supporting expectations of a more dovish stance from major central banks. Financial stocks led gains, with Bradesco up 0.7% and Banco do Brasil rising 1.4%. Other notable gainers included Rede D'Or (+1.5%) and Embraer (+1.5%).

The Ibovespa gained nearly 1% to trade above 173,000 on Thursday as investors reacted to weaker-than-expected US labor market data. The US economy added 57,000 nonfarm payrolls last month, well below forecasts of 110,000, reducing expectations of a Federal Reserve rate hike later this month and prompting a reassessment of the monetary policy outlook. Financial stocks posted gains, with Itaú up 1.5%, while Bradesco and Banco do Brasil advanced more than 1%. Utilities also traded higher, with Axia gaining nearly 2%. Vale rose over 1.5% as iron ore prices strengthened. Petrobras added more than 1.5% despite lower oil prices after reports that the company is preparing to enter nuclear power generation by installing a small modular reactor (SMR) at one of its refineries as part of its decarbonization strategy. Other notable gainers included Ambev (+1%), Rede D’Or (+1%), and Embraer (+1.5%).