Ibovespa Falls for Sixth Consecutive Session Amid Fiscal and Inflation Concerns

The Ibovespa index closed down for the sixth straight session, falling 0.34% to 124,305.57 points. This marked a nearly 3% decline for the week, the worst performance since March 2023.

The last full week of losses was in early September 2023, a shorter week due to Brazil’s Independence Day.

Adding to the market woes, the commercial dollar rose 0.27% to R$5.16, while future interest rates increased.

Central Bank President Roberto Campos Neto highlighted worsening inflation expectations and increased risk perceptions for Brazil.

Speaking at the X Annual Monetary Policy Seminar by the Getulio Vargas Foundation, he noted recent data showed negative inflation trends.

Additionally, he highlighted a specific risk premium added to Brazil’s interest rate curve.

In contrast, National Treasury Secretary Rogério Ceron provided a more optimistic outlook.

He stated that fiscal base recovery was proceeding as expected, with market projections for the primary deficit improving and aligning closely with government estimates.

Despite these reassurances, fiscal concerns remain high among analysts and investors. The worsening situation in Rio Grande do Sul exacerbates these worries.

The federal government released an additional R$1.8 billion for reconstruction efforts in the state, authorized through Provisional Measure 1,223/2024.

Trading volume was low on the stock front, influenced by the upcoming Memorial Day holiday in the U.S.

Despite ongoing monetary policy concerns, Wall Street saw gains driven by Nvidia’s strong performance.

Goldman Sachs analysts postponed their forecast for the first Fed rate cut from July to September, anticipating significant but imperfect inflation improvement.

In São Paulo, Vale (VALE3) saw marginal movement, up 0.05%, influenced by remarks from Mines and Energy Minister Alexandre Silveira on the Mariana (MG) case.

Iron ore futures in China also fluctuated, impacting Vale’s stock.

Market Recap

Petrobras (PETR4) fell 0.54%. Magda Chambriard’s appointment initially boosted stock, but by day’s end, it declined despite rising international oil prices.

Suzano (SUZB3) dropped 1.90%, despite announcing global pulp price increases starting in June.

The highlight of the day was the codeshare agreement between Azul (AZUL4) and Gol (GOLL4), boosting their stocks by 5.18% and 11.90%, respectively, hinting at a potential merger.

Dasa (DASA3) continued its strong performance, rising 11.78% following a 13.69% surge the previous day, fueled by speculation about a potential transaction with Amil.

The stock closed at R$4.27, up from R$3.38 at the previous day’s opening.

The upcoming week will be short due to holidays in both the U.S. and Brazil. Significant economic indicators are expected throughout the week.

These include IPCA-15 and Caged on Tuesday, PNAD on Wednesday, U.S. GDP on Thursday, and the PCE inflation report on Friday.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

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