Ibovespa Jumps to Near Four-Month High

The Ibovespa jumped 3% to close at 185,205 on Wednesday, nearing a four-month high after a new election poll showed President Lula and Senator Flávio Bolsonaro in a technical tie. Both candidates recorded 42% and 41% of voting intentions, respectively, in a potential runoff. Markets view Bolsonaro as more fiscally restrictive amid elevated yields and weak business activity. Bond yields fell after GDP data showed a contraction in consumer spending, while industrial production rebounded less than expected. Financials rallied, with Banco do Brasil up 4.9% and Itaú 3.8%. B3 gained 3.8% after tax assessments totaling R$2.2 billion were canceled. Utilities also gained, Axia rose 3.4% and Sabesp 4.2%. Vale gained 3.2% despite lower iron ore prices, while Petrobras added 2.8% as oil rebounded. Magazine Luiza jumped 16.9% on a Mercado Livre partnership, while Azzas surged 11.3% after agreeing to split its businesses into two listed companies.

The Ibovespa rose nearly 1.5% to trade around the 182,000 mark on Wednesday following the release of a new election poll. A Quaest poll on voting intentions for president in the October election 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. Lula had 42% of voting intentions in a potential runoff versus 41% for Flávio Bolsonaro. Meanwhile, Brazilian bond yields declined after GDP data showed a sharp contraction in consumer spending. Also, oil prices pulled back from recent peaks following a rally driven by escalating Middle East tensions, offering some relief to credit-sensitive stocks. However, energy costs and yields remain elevated. Major banks gained, with Banco do Brasil up nearly 1%. Utilities also advanced, with Sabesp rising over 1% and Eneva adding more than 2%. Petrobras fell 0.5% as oil prices declined.

The Ibovespa rose 1.3% to close at 179,722 on Tuesday, extending its winning streak to ten sessions amid renewed expectations for continued Selic easing. Brazil’s GDP grew more than expected in 2Q26, driven mainly by agriculture, while the detailed breakdown was weaker, signaling that economic momentum is fading despite a tight labor market and short-term demand stimulus measures. For the BCB, the data suggest that interest rates have already done much of the work, leaving room for further Selic cuts. Major banks advanced, with Banco do Brasil up 2.3%, Bradesco 1.2% and Itaú 0.9%. B3 gained 2.5% despite lower broker estimates, as its buy recommendation was maintained. Petrobras jumped 4.1%, tracking higher oil prices and benefiting from another monthly production record in July. Casas Bahia surged 36.4%, bringing its two-session gain to 125% after confirming the anticipation of effects from its judicial reorganization filing.