Ibovespa Falls Following Inflation Report

The Ibovespa fell over 0.5% to hover near 171,000 on Thursday following the release of October’s inflation data and amid a new batch of corporate earnings. Annual inflation rose to 4.63% in October from 4.58% in September, below market expectations of 4.74% but marking a four-month high and remaining above the BCB’s 4.5% target ceiling. With 12-month inflation still above target, the central bank is expected to remain cautious about resuming the Selic easing cycle. Credit-sensitive stocks fell. Financials declined, with Itaú, Bradesco, and Itaúsa each losing nearly 1%. Banco do Brasil plunged nearly 8% after Q3 results missed estimates and the bank cut its projections and dividends. B3 shed 1% ahead of its earnings. Utilities declined, with Axia down 1.5%. Elsewhere, Rede D’Or shed over 0.5% ahead of its results. Vale fell 1% on lower iron ore prices, while Petrobras added over 1% despite volatile oil prices.

The Ibovespa rose 0.4% to close at 172,060 on Wednesday after markets received moderately positively the first signals about the fiscal package President Lula is preparing for 2027. Planning Minister Moretti said the bill’s fiscal measures will have an impact of R$50 billion to R$60 billion in 2027, increasing in subsequent years, and will give the government more instruments to improve primary results. Moretti also said the proposal would allow additional spending freezes if necessary and that the government will “certainly” post a primary surplus in 2027. Major banks were mixed, Itaú rose 1.3%, while Banco do Brasil fell 1.2% ahead of its earnings. Other financials advanced, with B3 up 2.2% and Itaúsa 1.5%. Utilities also rose, with Axia adding 0.6%. Petrobras fell 3.1% after its Q3 report, as net income came in below market expectations. Vivo jumped 5.4% as it began Q4 with higher sales. Rede D’Or gained 2.7% ahead of its release tomorrow.

The Ibovespa rose near 1% to hover above 172,500 on Wednesday after the government’s economic team presented a preliminary fiscal adjustment proposal to Congress. Although details remain scarce, it is the first concrete sign of public-account adjustment since President Lula’s reelection. Credit-sensitive stocks gained. Major banks advanced, Itaú rose over 1%, Bradesco added more than 1.5%, and Banco do Brasil gained over 0.5% ahead of its earnings. Other financials also advanced, with B3 up over 2.5% and Itaúsa nearly 1.5%. Utilities rose as well, with Axia adding more than 1%. Meanwhile, Petrobras fell nearly 3% after its Q3 report. Net income of R$39.75 billion, up 21.5% year on year but below market expectations of R$47.02 billion. In contrast, Vivo added 4% as it began Q4 positively, with higher sales amid the launch of new Apple smartphone models. Rede D’Or gained 3% ahead of its release tomorrow.