On Thursday, the Ibovespa index experienced a decline of 0.7%, dipping below the 145,000 mark. This movement was primarily driven by significant sell-offs in sectors such as banking, energy, utilities, and major retail companies as investors weighed the repercussions of a newly proposed tax bill on consumer spending and prospective interest rates. State-controlled oil behemoth Petrobras saw a notable decrease due to another downturn in oil and gasoline prices. Gasoline price benchmarks, in particular, reached a four-year low amid abundant supply and uncertain global demand. In the utilities sector, companies like Eletrobras and Sabesp both experienced declines of over 1%.
On the political landscape, Brazil advanced a legislative measure that exempts individuals earning up to R$5,000 monthly from income tax. However, this proposal still requires Senate approval and the endorsement of President Lula. The banking and retail sectors were negatively impacted as futures rates climbed, despite assurances from the bill's sponsor, Arthur Lira, that the tax exemptions for lower-income earners would be balanced by increased taxes on high-income individuals and foreign exchange transactions. In other corporate developments, telecommunications firm Oi plummeted by 5.7% following a court decision to dissolve its board and impose a 30-day deadline for creditors to opt for either liquidation or restructuring options.
