FX.co ★ Ibovespa Declines, Posts Sharp Monthly Advance

On Friday, the Ibovespa index decreased by 1% to close at approximately 183,364, stepping back from recent peaks. This decline was driven by a significant drop in metal prices and a stronger dollar, which put pressure on major exporters and cyclical stocks, even though the index recorded an impressive 13.8% gain for January. Vale shares fell by 3.8% due to weakening iron ore prices and new operational challenges facing the company. This decline extended to the steel sector, with stocks like CSN and Gerdau falling by 4.3% and 1.4% respectively, thereby exacerbating the losses in materials. In the financial sector, institutions such as Banco do Brasil, Itaúsa, Bradesco, and Santander Brasil each dropped by over 1.5%. This decline likely resulted from profit-taking after a robust month and ongoing concerns about domestic economic growth. Conversely, Petrobras remained relatively unchanged despite oil prices stabilizing, providing little upwards momentum to the index. However, defensive segments like utilities and sanitation outperformed, with firms such as Sabesp, Sanepar, and Compania Sanea recording gains. On the macroeconomic level, Brazil's gross public debt decreased to 78.7% of GDP in December, and the primary budget balance reflected a surplus.