Brazil’s Ibovespa Index Gains Nearly 3% This Week, Driven by Metal Commodities

The Ibovespa index regained its footing above 122,000 points, buoyed by rising metal commodities and positive sentiment from Wall Street. This week, the index recorded a nearly 3% increase.

This reflects a robust market response to favorable economic indicators. On Friday, the Ibovespa closed at 122,350.38 points, marking a 0.92% rise for the day and a total increase of 2.94% for the week.

Investors reacted positively to the anticipated economic growth in China and the upcoming inauguration of Donald Trump as President of the United States. As for the U.S. dollar, it ended trading at R$ 6.0656, reflecting a slight increase of 0.20%.

Over the last five trading sessions, the dollar experienced a decrease of 0.60% against the Brazilian real. Domestically, investors responded to comments from Finance Minister Fernando Haddad.

In an interview with CNN Brasil, he emphasized the need to create conditions that prevent prolonged high-interest rates in Brazil. He also expressed concern over the rising trajectory of public debt but dismissed claims of fiscal dominance in Brazil.

Ibovespa and Global Market Reactions

Among the stocks traded on the Ibovespa, mining companies led the gains due to a reported 5% economic growth in China last year and strong iron ore performance.

Companies like CSN Mineração (CMIN3), Usiminas (USIM5), and Vale (VALE3) stood out in this sector. China achieved its government-set growth target of 5% last year, surpassing economists’ expectations of 4.9% for 2024.

Following this news, iron ore prices reached their highest level in over a month. The most traded contract for iron ore, expiring in May, rose by 1.71%, closing at 803.5 yuan (approximately $109.65) per ton on the Dalian Commodity Exchange.

Petrobras (PETR4; PETR3) diverged from negative oil trends, ending slightly higher despite broader market pressures. Conversely, Yduqs (YDUQ3) faced downward pressure after JP Morgan downgraded its recommendation to neutral and SPX reduced its stake in the educational sector.

In the United States, Wall Street rebounded from previous losses as investors anticipated Trump’s presidency starting on January 20th. Trump’s administration is likely to implement protectionist measures, including tariffs targeting various countries, including Brazil. Such policies may strengthen the dollar globally.

Additionally, investors reacted to the U.S. Supreme Court’s decision to uphold TikTok’s ban in the country. This news caused shares of Meta (owner of Facebook and Instagram) and Alphabet (owner of Google) to surge over 4% during trading.

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