Ibovespa Slips on Losses in Finance and Mining

The Ibovespa fell 0.7% to close at 204,302 on Wednesday but remained 9.6% higher on the week as markets gauged the outlook for earnings and interest rates should presidential candidate Flávio Bolsonaro win this month’s runoff. Bolsonaro finished ahead of incumbent President Lula in the first round, pushing the index to a record high. Banks and financial services companies led those gains as the resulting rally in bonds and credit improved the sector’s outlook. On Wednesday, the financial sector pulled back amid elevated global bond yields and hawkish FOMC minutes. Itaú fell 2.7%, Bradesco lost 3.7% and Itaúsa shed 3.3%. Vale fell 2.3% ahead of the reopening of Chinese iron ore markets on Thursday following the National Day holiday. CSN Mineração (-1.2%) and steelmakers also posted losses. Other laggards included Ambev (-1.7%) and Embraer (-5.1%).

The Ibovespa edged below 206,000 on Wednesday but remained 7% higher since the start of the week as markets gauged the outlook on earnings and interest rates should Presidnetial candidate Flavio Bolsonaro win the election runoff this month. Bolsonaro finished the first round of elections ahead of incumbent President Lula, pushing the index to a record high. Banks and financial services companies led those gains as the resulting rally in bonds and credit improved the outlook for the sector. Today, Vale fell nearly 2% ahead of the reopening of Chinese iron ore markets on Thursday following the National Day holiday. CSN Mineração (-1%) and steelmakers also posted losses. Other laggards included Ambev (-1.5%) and Embraer (-2%).

The Ibovespa fell 0.5% to close at 205,835 on Tuesday after hitting a record 206,912 in the previous session, when Flávio Bolsonaro finished ahead in Sunday’s first election round, defying most polls. The index was weighed by Petrobras (-2.8%) and Vale (-1.4%). Petrobras fell as the oil rally lost steam before prices edged higher late in the session. Vale extended losses ahead of the reopening of China’s iron ore market, which was closed from October 1 to October 7 for the weeklong National Day holiday. Banco do Brasil (-6.4%) and B3 (-2.7%) pulled back after surging 11% and 22.6%, respectively, on Monday. Other laggards included Axia (-3.1%), WEG (-1%) and Ambev (-1.5%). In contrast, Itaú (+2%) and Bradesco (+4.4%) extended gains after rallying 10.4% and 13.6%, respectively, on Monday. Brazil’s trade surplus surged 146.4% year over year in September, above forecasts of $7.19 billion and marking the sharpest annual increase since January 2024.