Selic Hopes And Global Easing Push Ibovespa Through 164,000 Points

Key Points

• Ibovespa notches a third straight record above 164,000 as weak GDP strengthens bets on early Selic cuts.
• Congress keeps the new fiscal framework intact while ring-fencing help for state firms, reassuring markets wary of statist drift.
• The rally is broad and liquid but technically overbought, leaving room for a pullback even as foreign money returns.

The Ibovespa closed Thursday at 164,455 points, up 1.67 percent, logging its third consecutive record and a gain of almost 3,000 points on the day.

The move came after third-quarter GDP expanded just 0.1 percent quarter on quarter, below expectations, reinforcing the view that a 15 percent Selic rate is now tighter than necessary.

Investors increasingly see rate cuts starting in January or March, a scenario that favours private-sector credit, housing and tech.

The political backdrop also helped. Congress approved the 2026 budget guidelines with a primary-surplus target of 0.25 percent of GDP and only a narrowly defined R$10 billion ($1.85 billion) exception to support state-owned companies such as Correios.

Finance minister Fernando Haddad stressed any capital injection would respect the fiscal framework, a message designed to calm fears of open-ended rescue spending.

Markets rewarded the combination of weaker growth, contained inflation and at least formal fiscal discipline. The dollar slipped to R$5.31 ($0.98).

Brazil Stocks Rally but Market Looks Overheated

Five stocks led the advance. Software group Totvs jumped about 7 percent as investors chased a rare domestic growth story with solid margins.

Health insurer Hapvida rebounded more than 6 percent in what traders saw as short-covering after a brutal year. Rental-car giant Localiza gained around 5 percent, a classic beneficiary of cheaper credit.

Meatpacker Marfrig and low-income homebuilder Cury, both sensitive to rates and the currency, added more than 4 percent each.

On the losing side, fashion chain C&A dropped about 9 percent and Lojas Renner nearly 3 percent as investors took profits in richly valued retailers.

Embraer slipped after a strong run on aircraft orders, while Braskem retreated when the company and its shareholders played down talk of an imminent sale. Ambev eased on concerns over beer volumes and local competition.

Technically, the index trades at the top of its Bollinger bands on both four-hour and daily charts, with the RSI above 80. The trend is firmly bullish, supported by strong volumes and renewed inflows into Brazil ETFs, but the market is stretched.

A consolidation toward the 159,000–160,000 range would be a healthy pause rather than a change in direction, as long as Brasília resists the temptation to test investors’ trust in the new rules.

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