Ibovespa Rises for Fourth Consecutive Session

The Ibovespa added 0.5% to close at 171,907 on Monday, posting its fourth consecutive gain following eleven consecutive days of losses. Vale surged 2.8%, supported by higher iron ore futures in China amid new signs of stimulus from Beijing and expectations of stronger demand ahead of the peak construction season in September. Banks also gained as the Focus Survey forecast for the Selic rate at the end of 2026 remained at 13.75% for the third consecutive week. Banco do Brasil gained 0.9% and B3 added 2.4%. Bradesco (+0.2%) and Itaú (+0.3%) were little changed after central bank chief Gabriel Galípolo warned of rising household debt and cautioned against further stimulus to credit and consumption. Petrobras shed 2.3% as oil prices pulled back ahead of US sanctions on Iran. Braskem (-6.7%) confirmed an out-of-court restructuring. B3 said the company would be removed from its indexes.

The Ibovespa shed nearly 1% to trade below 170,000 on Monday amid uncertainty surrounding imminent US sanctions against Iran. The measures could further restrict Iranian oil flows and rise oil prices further, creating renewed inflationary pressures. The financial market raised its estimate for 2027 inflation to 4.25% from 4.24%, according to the Focus Survey. The forecast for the Selic rate at the end of 2026 remained at 13.75% for the third consecutive week, after previously falling from 14%. The forecast for GDP growth in 2026 fell from 1.98% to 1.95%. Financials traded lower, with Itaú, Bradesco, Itaúsa and Banco do Brasil down about 1%. Petrobras tumbled 4.5% as oil prices pulled back as investors booked profits ahead of the US sanctions announcement. Utilities also posted losses, with Sabesp losing more than 1%. Meanwhile, a Datafolha poll showed President Lula and Senator Flávio Bolsonaro narrowly within a statistical tie in a potential runoff in the presidential election.

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.