Ibovespa Extends January Rally Into February; Awaits Copom Minutes

Key Points

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• The Ibovespa rose 0.79% on Monday to close at 182,793.40 points, extending January’s 12.56% rally, the best monthly performance since November 2020.

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• The dollar closed at R$5.2593, up 0.22%, but remains well below January’s highs after falling 4.40% last month.

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• Market awaits Copom minutes on Tuesday after the central bank held rates at 15% with signals pointing to potential rate cuts starting in March.

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• Technical indicators show RSI cooling from overbought levels across timeframes, suggesting momentum is moderating while the broader uptrend remains intact.

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\n\\nBrazil’s equity market extended its remarkable January performance into February, with the Ibovespa adding another 0.79% on Monday to reach 182,793.40 points.\n\\n\n\\nThe move follows what was the index’s best month since November 2020, when it gained 12.56% and briefly touched 186,000 points intraday for the first time.\n\\n\n\\nForeign investors poured more than R$23 billion ($4.26 billion) into Brazilian equities through January 28, the largest monthly inflow since January 2022.\n\\n\n\\nMonday’s session was supported by gains in Vale and the banking sector, while Petrobras shares fell nearly 2% after Brent crude dropped 4.36% to $66.30 per barrel.\n\\n\n\\nVale managed to buck the negative tone in iron ore, which fell 1.26% in Dalian to 783 yuan ($112.62) per ton. The banking sector rose ahead of fourth-quarter earnings releases this week from Itaú, Santander, and Bradesco.\n\\n\n\\nTogether with Vale and Petrobras, these names account for roughly 50% of the Ibovespa‘s theoretical portfolio. The domestic focus is squarely on monetary policy.\n\\n\n\\nThe first Boletim Focus survey since the Copom decision showed economists cutting their 2026 inflation forecast for the fourth consecutive week, from 4% to 3.99%.\n\\n\n\\nThe Copom held the Selic at 15% but revived forward guidance pointing to rate cuts starting in March, with markets pricing in a 0.50 percentage point reduction. The minutes due Tuesday should provide clarity on the committee’s confidence in the disinflation path.\n\\n\n\\nDirecional and Cury led gainers on the day, benefiting from expectations of lower rates, while Raízen topped the losers after news that Raízen Biomassa acquired 100% of Sumitomo.\n\\n

Global Context

\n\\nWall Street closed higher despite concerns about a potential AI bubble and the start of a new government shutdown.\n\\n\n\\nThe Bureau of Labor Statistics announced that Friday’s payroll report will be delayed due to the partial federal shutdown, with a vote on a bill to suspend the shutdown expected Tuesday.\n\\n\n\\nPresident Trump announced a trade deal with India, including commitments to stop buying Russian oil and increase purchases from the U.S. and potentially Venezuela.\n\\n\n\\nInvestors also digested the nomination of Kevin Warsh to replace Jerome Powell as Fed Chair when his term ends in May. The Fed held rates at 3.50%-3.75% in January with two dissents favoring a cut.\n\\n\n\\nIn Europe, the Stoxx 600 hit a new all-time high at 617.31 points, while London’s FTSE 100 also reached a record close. Asian markets were weaker, with Japan’s Nikkei down 1.25% and Hong Kong’s Hang Seng off 2.23%.\n\\n

Technical Analysis

\n\\nThe charts below capture the market’s current technical posture across three timeframes. While the uptrend remains firmly intact, momentum indicators suggest the pace of gains is moderating after January’s sprint.\n\\n\n\\n4-Hour Chart: RSI has pulled back to around 72.67, cooling from the recent extreme readings. MACD momentum has turned negative at -618.30, signaling short-term consolidation. Price remains above all major moving averages, with key support levels at 181,808 and 180,677.\n\\n\n\\nDaily Chart: RSI sits at 76.26, still elevated but below the peak. The index is trading well above its 200-day moving average (145,994) and maintaining position above the Ichimoku cloud. MACD remains positive at 1,221.29, supporting the medium-term bullish case.\n\\n\n\\n

\n\\n\n\\nWeekly Chart: RSI at 83.04 keeps the overbought warning active on the longest timeframe. However, MACD momentum at 2,288.78 remains strongly positive. The index has broken decisively above the consolidation range that defined much of 2024-2025, establishing new all-time highs.\n\\n

February Outlook

\n\\nThe message for February is straightforward. The trend remains up, but the market is now priced for continued good news and steady foreign demand.\n\\n\n\\nThe massive January inflow—nearly matching all of 2025’s foreign buying in a single month—sets a high bar for continuation.\n\\n\n\\nKey catalysts this week include the Copom minutes on Tuesday, bank earnings throughout the week, and any resolution to the U.S. government shutdown.\n\\n\n\\nWith RSI readings overbought across all timeframes and momentum indicators showing signs of cooling, near-term consolidation or pullbacks would be healthy and should not be mistaken for a trend reversal.\n\\n\n\\nSupport levels to watch include 180,677 on the 4-hour chart and the psychological 180,000 level. A sustained break below these could signal a deeper correction, while continued inflows and positive earnings surprises could push the index toward the 185,000-186,000 zone tested in late January.\n\\n

Market Closes – February 3, 2026

\n\\nBrazil: Ibovespa +0.79% at 182,793.40 | USD/BRL R$5.2593 (+0.22%)\n\\n\n\\nU.S.: Dow Jones +1.05% at 49,440.66 | S&P 500 +0.54% at 6,976.44 | Nasdaq +0.56% at 23,592.10\n\\n\n\\nEurope: Stoxx 600 +1.03% at 617.31 (record) | FTSE 100 +1.15% at 10,341.56 (record)\n\\n\n\\nAsia: Nikkei -1.25% at 52,655.18 | Hang Seng -2.23% at 26,775.57\n\\n\n\\nCommodities: Brent Crude -4.36% at $66.30 | Iron Ore -1.26% at 783 CNY ($112.62)\n

For broader market context, see Brazil’s Morning Call for this date. This is part of The Rio Times’ daily coverage of the Brazilian stock market and Latin American financial markets.

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