Ibovespa Rises on Banking and Energy Gains

The Ibovespa rose 1.6% to close at 208,296 on Tuesday, supported by a new election poll and a positive external backdrop. A Real Time Big Data poll released on Monday showed Flávio Bolsonaro leading President Lula in a presidential runoff, with 52% of valid votes against 48%. Although Bolsonaro has yet to detail his policy plans, investors view his candidacy as more likely to bring fiscal reforms, including spending cuts, which could help lower interest rates. Meanwhile, easing oil prices provided relief to credit-sensitive sectors pressured by energy-driven inflation. Major banks advanced, with Itaú and Bradesco each gaining around 2.9%. Among other financials, B3 jumped 5.4%. Utilities also rose, with Axia up 0.9%, while retailers posted sharp gains, led by Magazine Luiza, which soared 14.8%. In contrast, Vale fell 1.4% as Chinese iron ore prices declined.

The Ibovespa rose more than 1% on Tuesday, hovering near 208,000, supported by gains in the banking and energy sectors. A Real Time Big Data presidential runoff poll released on Monday showed Flávio Bolsonaro with 52% of valid votes against President Lula, who had 48%. Although Bolsonaro has yet to present detailed policy plans, investors view his candidacy as more likely to bring fiscal reforms, including spending cuts, which are seen as important to lowering interest rates. Major banks traded higher, with Itaú and Bradesco each gaining around 1%. Meanwhile, Petrobras rose nearly 1% as international oil prices remained elevated amid escalating tensions in the Middle East. Elsewhere, utilities were mostly higher, with Sabesp rising nearly 2%. Retailers posted sharp gains, with Magazine Luiza jumping more than 6%. In contrast, Vale fell more than 1% as Chinese iron ore prices declined.

The Ibovespa edged 0.2% lower to close at 205,079 on Monday, erasing earlier gains as credit-sensitive stocks ended mixed. Brazilian assets traded without a clear direction as investors remained cautious at the start of the week ahead of the presidential runoff. Polls by BTG/Nexus and AtlasIntel showed declining support for Flávio Bolsonaro and rising support for Lula, although Bolsonaro remained ahead in both surveys. The BTG/Nexus poll indicated a statistical tie, while AtlasIntel showed Bolsonaro’s lead exceeding the margin of error. Although Bolsonaro has yet to present detailed policy plans, investors view his candidacy as more likely to bring fiscal reforms, including spending cuts, which are seen as important to lowering interest rates. Financials closed mixed, with Itaú down 0.4% and Bradesco shedding 1.3%, while BB gained 1.3% and B3 rose 1.8%. Utilities were mostly lower, with Axia falling 1.3%. Petrobras also weighed on the index, dropping 2.8%.