Ibovespa Falls as Oil Prices Rise

The Ibovespa fell nearly 0.5% to trade below 187,000 on Wednesday as intensifying hostilities in the Middle East pushed oil prices higher, rekindling inflation fears. Risks to global energy supplies have risen in recent weeks as the six-month-old conflict escalated. Credit-sensitive stocks, including major banks, came under pressure, with Itaú and Bradesco losing about 1%. Utilities also posted losses, with Axia falling more than 1.5%. Other notable laggards included Ambev (-1%) and WEG (-1.5%). Vale edged lower as iron ore prices fell. In contrast, Petrobras gained nearly 1.5% as the oil rally intensified.

The Ibovespa rose 1.2% to close at 187,367 points on Tuesday following Monday’s holiday, posting broad-based gains. Petrobras rose 2.1% as oil prices surged following attacks on energy infrastructure in Saudi Arabia amid renewed hostilities in the Middle East. Banks also performed well, Bradesco rose 1.8% and Itaú advanced 1.2%, as the Focus survey released Tuesday continued to project lower inflation, raising the prospect of further interest-rate cuts. Meanwhile, a BTG/Nexus poll pointed to a technical tie between Flávio Bolsonaro and President Lula in a potential presidential runoff, although Flávio moved into a numerical lead of one percentage point. On Monday, a Quaest poll also showed the two tied at 41% in a second-round scenario. Flávio Bolsonaro is viewed by markets as more fiscally restrictive amid elevated yields and weak business activity. Sabesp gained 1.1% after brokerages raised their price targets following a meeting with the company’s management.

The Ibovespa jumped more than 1.5% to trade close to 188,000 on Tuesday following Monday’s holiday, posting broad-based gains. Petrobras rose more than 1.5% as oil prices surged following attacks on energy infrastructure in Saudi Arabia amid renewed hostilities in the Middle East. Vale gained about 2% as iron ore prices in China rose, driven by lower shipments and expectations of a seasonal recovery in Chinese demand. Meanwhile, a BTG/Nexus poll pointed to a technical tie between Flávio Bolsonaro and President Lula in a potential presidential runoff, although Flávio moved into a numerical lead of one percentage point. On Monday, a Quaest poll also showed the two tied at 41% in a second-round scenario. Flávio Bolsonaro is viewed by markets as more fiscally restrictive amid elevated yields and weak business activity. Major banks gained, with Itaú up more than 2% and Bradesco adding more than 1.5%. Utilities rose as well, with Axia gaining nearly 2%. WEG and Rede D’Or both rose about 2%.