Ibovespa Falls on Earnings Weakness

The Ibovespa fell 1.1% to close at 204,120 on Thursday amid uncertainty over the presidential race and corporate earnings. On Wednesday, a Quaest poll showed Flávio Bolsonaro’s lead over Lula narrowing to one percentage point, leaving the candidates statistically tied just four days before Sunday’s presidential runoff. Many market participants believe a Flávio administration would be more likely to rein in public spending, although neither the candidate nor his economic advisers have outlined concrete fiscal adjustments. Datafolha is scheduled to release a new presidential voting-intention poll after the market close on Thursday. Financial stocks declined, with Itaú down 1.8%, Itaúsa losing 2.6% and Bradesco shedding 2.1% ahead of its earnings release later in the day. Vale dropped 4% amid falling iron ore prices, with the miner set to report results next week. WEG slipped 2.7% after plunging 7% on Wednesday following disappointing results.

The Ibovespa edged lower, hovering near 205,500 on Thursday amid speculation over the presidential race and corporate earnings. On Wednesday, a Quaest poll showed Flávio Bolsonaro’s lead over Lula narrowing to one percentage point, leaving the candidates statistically tied just four days before Sunday’s presidential runoff. Many market participants believe a Flávio administration would be more likely to rein in public spending, although neither the candidate nor his economic advisers have outlined concrete fiscal adjustments. Datafolha is scheduled to release a new presidential voting-intention poll after the market close today. Financial stocks fell, with Itaú down 0.8%, and Bradesco shedding 1% ahead of its earnings due later today. Vale dropped 2% amid falling iron ore prices, with the miner set to report results next week. WEG slipped 0.1% after plunging 7% yesterday on disappointing results. Petrobras (+1%) helped limit losses in the index, supported by a resume in the oil rally.

The Ibovespa fell 0.9% to close at 206,495 on Wednesday amid election-related uncertainty. The index opened higher but reversed course after a Quaest poll showed challenger Flávio Bolsonaro and incumbent President Lula nearly tied in the presidential runoff. The survey also found that 52% of respondents would “never” vote for Bolsonaro, compared with 47% for Lula, whose rejection rate fell six percentage points in a week. Although Bolsonaro has yet to detail his policy plans, investors view his candidacy as more likely to bring fiscal reforms that could pave the way for lower interest rates. Credit-sensitive stocks came under pressure, with financials mostly lower. Bradesco edged down, BB fell 0.4%, Itaúsa lost 0.6% and B3 erased earlier gains to close 0.8% lower. Retailers also mostly declined, with Magazine Luiza dropping 3.4%. Elsewhere, WEG plunged 7.3% after disappointing third-quarter margins. Vale fell 2.1% on lower iron ore prices. Petrobras lost 0.8% amid volatile oil prices.