Ibovespa Extends Seven-Month Low

The Ibovespa shed 0.1% to close at 166,934 on Friday, extending its seven-month low. Oil and gas prices gained as the US threatened to intensify economic pressure on Iran, including by extending the naval blockade. Energy-driven inflationary pressures weighed on financials and other credit-sensitive shares as bond yields moved higher. Bradesco lost 0.7%, Itaúsa shed 0.4% and B3 fell 0.6%, while Itaú (+1.8%) and Banco do Brasil (+0.9%) bucked the trend. Utilities also traded lower, with Sabesp down over 2% and CPFL losing over 4.5% after reporting earnings, as growth in its industrial sector was modest and net debt rose 19.2%. Renner shed 2.6% after UBS BB abandoned its buy recommendation and cut its price target. Raízen (-4%) posted a net loss in the first quarter of fiscal 2026/27. Vale (-0.8%), Ambev (-1.1%) and Rede D’Or (-2.5%) also weighed on the index. On the upside, Petrobras rose 0.4% on higher oil prices, while Embraer added 2.4% after JPMorgan raised its price target.

The Ibovespa shed near 1% to below 166,000 on Friday, extending its seven-month low as the impasse in negotiations to end the war in the Middle East pushed oil prices higher. Oil and gas prices were on track for strong weekly gains as the US threatened to intensify economic pressure on Iran, including by extending the naval blockade. Energy-driven inflationary pressures weighed on financials and other credit-sensitive shares. Banco do Brasil, B3 and Caixa Econômica shed near 1%, while Itaúsa lost 0.5%. Utilities also traded lower, with Sabesp down over 1% and CPFL losing over 3% despite reporting an 21.3% annual rise in net profit, as growth in its industrial sector was modest and net debt rose 19.2%. Meanwhile, Cemig gained nearly 3% after reporting an 8.8% rise in EBITDA. Elsewhere, Raízen (-4%) posted a net loss in the first quarter of fiscal 2026/27. Braskem (+3%) reported net income of R$3.33 billion, reversing a loss. MBRF (+5%) reported net income of R$69 million in 2Q26.

The Ibovespa shed 0.2% to close at 167,101 on Thursday, erasing earlier gains and retreating to a seven-month low amid a batch of weak corporate earnings. Banco do Brasil shed 4.2% after reporting below-expectation profits in the second quarter. Sabesp tumbled 7% after reporting an 11.2% year-on-year drop in net profit. CSN Mineração lost 5.2% after posting cash flow below market expectations. In contrast, CSN jumped 5.6% despite reporting a net loss, as the loss was smaller than expected and revenue grew 6%. Hapvida sank 33.1% after its second-quarter results showed margin pressure and rising litigation costs. Meanwhile, Rede D’Or added 6.3% after reporting a 9.7% year-on-year increase in net profit. Vale fell 1.7% as iron ore prices declined, with weak profitability among Chinese steelmakers continuing to constrain prospects for a meaningful recovery in ore demand. Petrobras (+1.1%) rose despite lower oil prices as peace negotiations in the Middle East remained at a stalemate.