Ibovespa Jumps Ahead of Datafolha Poll

The Ibovespa jumped 1.8% to close at 171,032 on Friday, supported by a broad rally in financial stocks. The political landscape remained in focus ahead of a new Datafolha poll on Brazil’s October presidential election, due after the close. On Monday, a BTG/Nexus poll showed President Lula and Senator Flávio Bolsonaro, viewed by markets as more fiscally restrictive amid elevated domestic yields and weak business activity, in a technical tie in a potential runoff. Bond yields fell on expectations of a tighter presidential race and broad-based weakness in the US dollar. Itaú rose 2.9%, Bradesco added 3.1%, Itaúsa gained 2.5%, and B3 jumped 5.2%. Utilities also advanced, with Axia up 1.4% and Sabesp rising 1.9%. Vale added 1.4% as iron ore prices firmed, while CSN Mineração (+4.8%), CSN (+7.6%) and Usiminas (+7.9%) rallied. Embraer (-1%) and Petrobras (-0.1%) were among the few laggards.

The Ibovespa rose more than 1% to trade above 170,000 on Friday ahead of a new election poll. Datafolha is due to release a new survey on the outlook for the presidential election in October. On Monday, a BTG/Nexus poll showed President Lula and Senator Flávio Bolsonaro, viewed by markets as more fiscally restrictive in a time where elevated domestic yields have dampened business activity, in a technical tie in a potential runof. Financials advanced, with Itaú, Bradesco, Itaúsa, Banco do Brasil and B3 gaining about 1% each. Credit-sensitive stocks also benefited from lower oil prices, which pushed bond yields down. Elsewhere, Vale added nearly 1.5% as iron ore prices firmed. Meanwhile, Petrobras (+0.5%) said it had expressed interest in offshore exploration blocks in Ghana.

The Ibovespa edged 0.1% higher to close at 167,927 on Thursday, supported by gains in commodity-related stocks. Petrobras rose 2.8%, tracking a strong increase in oil futures, which also boosted PRIO, up 0.8%. Oil prices continued to rise as the war with Iran appeared increasingly far from a resolution after US President Donald Trump announced a package of measures aimed at hurting Iran’s economy. Vale jumped 2.6%, despite a decline in Chinese iron ore futures. Steelmakers, however, remained under pressure amid expectations of a possible agreement between Canada and the US that could lead to lower US tariffs on Canadian steel, making Brazilian companies less competitive. Gerdau fell 2.5%. Banks struggled as bond yields moved higher on energy-driven inflation concerns. Banco do Brasil fell 0.2%, Bradesco dropped 1.7% and Itaú lost 2.2%. Elsewhere, Ultrapar gained 1.1% after brokerages raised their price targets. Marcopolo rose 6.5% following a share buyback and dividend announcement.