The Ibovespa slipped 0.7% on Wednesday to close at 204,302, but remained up 9.6% for the week as investors assessed the earnings and interest-rate outlook in the event presidential candidate Flávio Bolsonaro wins this month’s runoff. Bolsonaro’s first-round lead over incumbent President Lula had previously driven the index to a record high, with banks and financial services stocks at the forefront as a rally in bonds and credit brightened the sector’s prospects.
On Wednesday, however, financials retreated amid higher global bond yields and hawkish FOMC minutes. Itaú fell 2.7%, Bradesco dropped 3.7%, and Itaúsa declined 3.3%. Vale lost 2.3% ahead of Thursday’s reopening of Chinese iron ore markets following the National Day holiday, while CSN Mineração (-1.2%) and steelmakers also ended lower. Other notable decliners included Ambev (-1.7%) and Embraer (-5.1%).
