Ibovespa Sets Fresh Records As Global Rate-Cut Bets Power Brazil Rally

Brazil’s stock market heads into Thursday trade hovering at record territory, after the Ibovespa jumped 1.70% on Wednesday to close at 158,554.94 points, with an intraday high of 158,713.52.

The dollar slipped to about R$5.33, a move that would normally signal solid foreign appetite even as official FX data still show November outflows of nearly $3 billion.

ETF pricing confirms the enthusiasm. BOVA11 finished at R$155.74, a 52-week high on above-average volume, while New York–listed EWZ closed at $33.41, up more than 40% this year as the Ibovespa’s 2025 gain approaches one third.

The macro backdrop mixed market-friendly signals with lingering fiscal questions. The IPCA-15 inflation “preview” rose 0.20% in November, slightly above expectations, leaving 12-month inflation at 4.50%—uncomfortable but inside the tolerance band.

President Luiz Inácio Lula da Silva signed an income-tax reform that lifts the monthly exemption to R$5,000 and introduces new brackets up to R$7,350, with a higher rate on very high incomes.

The tax authority estimates a revenue loss of R$1.9 billion, sharpening scrutiny of Brasília’s budget discipline even as households enjoy relief.

Banks Rise as Credit Expands and Markets Eye Rate Cuts

The central bank’s October credit report showed total credit stock up 0.9% on the month to R$6.9 trillion, with non-performing loans in free-market credit at 5.3% and average spreads at a still-hefty 32.6 percentage points.

That combination of volume and pricing helped banks climb between 1% and 3%. Vale added around 1.5%, above R$66, after iron ore in Dalian inched higher, while Petrobras lagged as oil eased.

Top gainers inside the index were Rumo (+9.1%), boosted by reports of growing interest from Ultrapar; Vamos (+6.6%); cash-and-carry chain Assaí (+6.4%); jeweler Vivara (+4.5%); and cosmetics group Natura (+4.3%), all seen as beneficiaries of lower-rate expectations and steadier consumption.

On the losing side, Hapvida tumbled 7.1% amid fresh analyst downgrades and a deeply negative year, followed by Magazine Luiza (−1.5%), fuel distributor Vibra (−1.0%) after news of delayed payouts and dilution, and smaller drops in Totvs and Braskem on profit-taking.

Globally, Wall Street’s main indices gained between 0.7% and 0.8% after the Federal Reserve’s Beige Book pointed to flat activity but slightly weaker employment, reinforcing bets on another rate cut in December.

Europe’s Stoxx 600 rose about 1.1%, while Japan’s Nikkei jumped 1.85% as Prime Minister Sanae Takaichi promised to avoid a UK-style fiscal shock and signaled readiness to fight speculative yen swings. Hong Kong’s Hang Seng inched higher.

Technically, the Ibovespa trades near the top of its weekly and daily bands, with momentum strong but oscillators firmly overbought.

Short-term support has risen toward the 153,000–156,000 range, leaving room for further gains but also for a sharp pause if global risk sentiment sours or Brasília’s fiscal debate turns louder.

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