Brazil’s B3 Recovers as Vale and Lower Inflation Drive Gains, Technicals Signal Cautious Optimism

Brazil’s B3 stock market closed Thursday, June 26, 2025, with the Ibovespa index up 0.99% at 137,113.89, according to official exchange data.

The market reversed recent losses after Congress blocked a proposed increase in the IOF financial transactions tax and inflation data came in lower than expected.

The IPCA-15 inflation preview rose 0.26% in June, its slowest pace for the month since 2023, and below analyst forecasts. This eased concerns about further monetary tightening and supported equities.

Vale shares led the gains, rising over 3% as iron ore prices in China rebounded. Petrobras also finished higher, tracking a modest rise in Brent crude. Cyclical stocks like Azzas 2154 and Vivara outperformed, benefiting from lower interest rate expectations.

On the losing side, Localiza fell over 7% as investors reacted to government discussions about cutting industrial taxes on small cars, which could pressure margins for car rental firms. Grupo Vamos and Vibra Energia also posted notable declines.

The day’s trading volume reached 726 million shares, in line with recent averages. ETF flows mirrored the positive sentiment, with the main iShares Ibovespa ETF gaining 0.96% and the Caixa Ibovespa ETF up 0.97%.

The Brazilian real strengthened, with the dollar closing at R$5.4986, down 1.02% against the local currency. Technical analysis of the daily Ibovespa chart shows the index bouncing from support near 135,750 and closing above the key 137,000 level.

Ibovespa Consolidates as Market Awaits Breakout Signal

The 200-day moving average remains well below current prices, confirming a long-term uptrend. The Relative Strength Index (RSI) stands at 50.63, suggesting the market is neither overbought nor oversold but has room to move higher.

The MACD indicator remains negative, but its histogram is flattening, signaling that bearish momentum is losing strength. Bollinger Bands show the index holding above its midline, indicating a period of reduced volatility after recent swings.

On the 4-hour chart, the Ibovespa continues to consolidate between 136,860 and 137,600, with the RSI at 49.13 and the MACD still negative but stabilizing.

The price remains at the top of the Ichimoku cloud, reflecting indecision but also underlying support. If the index breaks above resistance at 137,600, further gains could follow, but a drop below 136,860 would signal renewed weakness.

Compared to global peers, the Ibovespa’s performance aligns with Wall Street, where the S&P 500 and Nasdaq closed near record highs, driven by technology stocks and increased bets on a US rate cut.

In Asia, Japan’s Nikkei rose 1.65%, while Hong Kong’s Hang Seng slipped. European markets ended slightly higher. The Ibovespa’s 13.99% year-to-date gain outpaces several emerging market benchmarks, reflecting Brazil-specific drivers.

The session’s story centers on domestic fiscal relief and softer inflation, which together spurred a rebound in heavyweight stocks and improved risk appetite. Technical signals point to stabilization, but the market awaits a clear breakout to confirm a new upward trend.

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