Hawkish Central Bank Tone And Global Risk-Off Knock Ibovespa From Record

Brazil’s equity rally paused on Monday as the Ibovespa slipped 0.29% to 158,611 points, pulling back from Friday’s nominal record and starting December with a dose of profit-taking.

The move came against a backdrop of tougher central-bank rhetoric at home and a weaker tone across major markets, with the dollar climbing to around R$5.36 as investors trimmed risk.

At an XP conference in São Paulo, Central Bank president Gabriel Galípolo repeated that the Selic will stay at 15% “for as long as necessary” until inflation is clearly anchored at the 3% target.

He stressed there are no new factors to justify changing the market’s expectation of steady rates at next week’s Copom meeting.

For equity traders, the message was simple: higher for longer, with generous returns on public debt still competing directly with stocks and limiting the space for fiscal experimentation.

Abroad, Wall Street snapped a winning streak as the Dow fell 0.90%, the S&P 500 0.53% and the Nasdaq 0.38%, pressured by another weak ISM manufacturing reading and rising U.S. Treasury yields. In Europe, the STOXX 600 eased 0.2%, dragged by a more than 5% drop in Airbus after fresh A320 issues.

In Asia, Japan’s Nikkei lost 1.89% after Bank of Japan governor Kazuo Ueda signaled he will weigh the “pros and cons” of raising rates in December, while Hong Kong’s Hang Seng gained 0.67% on renewed enthusiasm for technology shares.

High Rates Hit Consumption Stocks as Exporters Shine

On the B3, banks traded mixed and failed to pull the index higher, while big exporters cushioned the fall. Vale advanced more than 1% as iron ore in Dalian rose 1.14% to 801 yuan a ton.

Petrobras also inched up with Brent near $63 a barrel, supported by news of the Abreu e Lima refinery expansion, an adjusted Tupi production-sharing agreement, and a 3.8% hike in aviation fuel prices.

Among individual names, Eneva led the winners, up more than 3% after being reaffirmed as a top pick by Santander and added to BTG Pactual’s recommended portfolio.

WEG, BB Seguridade, TOTVS and Bradespar also closed higher, favored by exporters’ earnings visibility and the appeal of cash-generating financial and software franchises.

On the losing side, MBRF tumbled about 8% on portfolio rebalancing after a sharp recent rally, followed by C&A, CVC, TIM and Minerva, all punished in a session that reminded investors how sensitive leveraged consumption and weaker corporate stories remain to a 15% policy rate and fading global liquidity.

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