FX.co ★ Ibovespa Drops Further from Record Highs

The Ibovespa index experienced a decline of 0.3%, closing at 139,864, influenced by worsening growth metrics and increasing political instability. In Brazil, industrial production decreased by 0.2% in July compared to June, marking the fourth consecutive month of decline. On an annual basis, output increased slightly by 0.2%, highlighting the ongoing impact of high borrowing costs on manufacturing activities. In the services sector, there has been only a slight improvement without a significant recovery, as indicated by the PMI rising to 49.3 in August but still remaining in contraction territory. Additionally, political tensions continue as the Supreme Federal Court proceeds with the final phase of Jair Bolsonaro’s coup trial, elevating the risks related to governance and the stability of institutions. Notable declines were observed in companies like Petrobras, which fell by 1%, Ambev by 2.1%, Eletrobras by 1.1%, and Itaúsa by 1.3%.