Ibovespa Falls on Political and Inflation Concerns

The Ibovespa fell 0.9% to close at 185,814 on Wednesday following new election polls and a rebound in oil prices. An AtlasIntel poll for October’s presidential election showed President Lula regaining a numerical lead over Senator Flávio Bolsonaro in a potential second-round runoff, although the candidates remain in a statistical tie. Oil prices rose amid uncertainty over diplomatic efforts to end the US-Iran war and reopen the Strait of Hormuz. Energy-driven inflation concerns persisted. In addition, Copom’s minutes from its latest meeting, released yesterday, were more hawkish than expected. Financials weighed on the index, with Itaú down 1.9%, Bradesco and Banco do Brasil both falling 2.2%, and Itaúsa shedding 1.9%. Utilities also traded lower, with Sabesp losing nearly 2.8%. Vale fell 1.8% amid weak profitability among Chinese steelmakers. Petrobras gained 2.6% on rising oil prices.

The Ibovespa moved between gains and losses close to the 188,000 mark on Wednesday following new election polls and amid volatile oil prices. An AtlasIntel poll for October’s presidential election showed President Lula regaining a numerical lead over Senator Flávio Bolsonaro in a potential second-round runoff, although the candidates remain in a statistical tie. Oil prices moved higher, paring earlier losses amid uncertainty over diplomatic efforts to end the US-Iran war and reopen the Strait of Hormuz. Energy-driven inflation concerns persisted despite the slowdown in the oil rally in recent weeks. In addition, Copom’s minutes from its latest meeting, released yesterday, were more hawkish than expected. Financials weighed on the index, with Itaú, Bradesco, and Itaúsa down over 0.5% each, while B3 shed nearly 2%. Utilities also traded lower, with Axia and Sabesp losing nearly 1%. Vale fell nearly 1% amid weak profitability among Chinese steelmakers. Petrobras gained nearly 2%.

The Ibovespa rose 0.4% to close at 187,423 on prospects for US-Iran talks, rebounding from earlier losses. US President Trump said US officials had a “very good” meeting with Iranian envoys at the UN General Assembly and that another was planned. A senior Iranian official said Iran could reopen the Strait of Hormuz within days if the US eased military pressure and lifted its blockade on Iranian ports. The pullback in the oil rally supported equities. Banks ended mixed, with BB and Santander falling 1.4% and 0.6%, while Bradesco and Itaú rose 1.5% and 0.2%. Petrobras gained 0.7% despite lower oil prices. Vale rose 0.4% after confirming a 30% stake acquisition in Ligga, while Axia gained 1.3%. Copom’s somewhat hawkish minutes kept the index volatile.