FX.co ★ Ibovespa Hits Fresh Record High

The Ibovespa index climbed by 1.7%, reaching a historic high of 164,468, primarily fueled by the expectation of a forthcoming interest rate reduction in the United States, which lowered global discount rates and attracted increased portfolio investments. Domestically, conditions also pointed towards a potential easing of policy. The Gross Domestic Product (GDP) rose by 1.8% year-over-year for the quarter—marking the slowest growth in over three years. This evident economic slowdown increases the likelihood that the Central Bank might initiate a reduction in policy rates, which are currently at nearly two-decade highs, in the coming months. Additionally, reduced headline inflation forecasts and stable fiscal conditions have diminished a significant risk premium for local equities, enhancing valuations and enabling capital flows and company-specific developments to take precedence in short-term market movements. Broad-based gains were seen with Vale rising by 1.8%, WEG by 0.9%, Banco do Brasil by 2.0%, Eletrobras by 2.9%, and Rede D'Or leading with a 3.3% increase.