Ibovespa Slips as Financials Weigh

The Ibovespa edged down to hover below 173,000 on Tuesday, weighed down by losses in financial stocks. Financials traded lower as elevated oil prices fueled energy-driven inflation concerns. Itaúsa and Bradesco shed nearly 0.5%, while Itaú and Banco do Brasil edged lower. Utilities also posted losses, with Sabesp and Axia down around 0.5%. Other notable laggards included Rede D'Or (-3%) and Vivo (-0.5%). Meanwhile, hopes for diplomacy in the Middle East were boosted by reports that Iran is considering a proposal from mediators for a 10-day ceasefire aimed at paving the way for a lasting peace agreement. However, oil prices remained elevated, supporting Petrobras, which gained nearly 0.5%. Vale rebounded nearly 1% after retreating in the previous session on lower iron ore prices.

The Ibovespa shed 0.2% to close at 173,371 as gains in banking stocks failed to offset weakness in the broader market amid concerns over further escalation in the Middle East. Oil prices swung sharply amid the worsening conflict between the US and Iran, the geopolitical risks and energy-driven inflation concerns weighed on sentiment. Utilities posted losses, with Sabesp down 0.8% and CPFL shedding 1.2%. Vale lost 1.4% as iron ore prices declined amid seasonal weakness in Chinese steel demand and narrowing mill margins. Other notable laggards included WEG (-1.1%) and Rede D'Or (-0.9%). Meanwhile, major banks advanced after the BCB's Focus survey showed the market lowered its 2026 inflation forecast for the third consecutive week. Itaú gained 0.8% and Bradesco rose 0.7%. Petrobras added 0.6% on higher oil prices.

The Ibovespa inched up to trade close to 174,000 on Monday as the BCB's Focus survey showed the market lowered its 2026 inflation forecast for the third consecutive week. The 2026 IPCA forecast was revised down to 5.15% from 5.16% a week earlier and 5.33% one month ago. The market also maintained its forecast for the benchmark Selic rate at 14.00% by the end of 2026 for the fourth consecutive week. Financials traded higher, with Itaú, Bradesco, and Itaúsa adding more than 0.5%, while Banco do Brasil gained 0.5%. Most utility stocks also posted gains, with Axia and Sabesp edging higher. Steelmakers rebounded after coming under pressure last week following the US announcement of new tariffs on Brazilian imports, with Gerdau up more than 0.5% and CSN adding nearly 1.0%. Meanwhile, lower iron ore prices weighed on miners. Vale traded muted and CSN Mineração shed more than 0.5%.