FX.co ★ Ibovespa Slides for 3rd Straight Session

On Thursday, the Ibovespa index declined by 1.1%, closing at 143,950, marking its third successive downturn. This drop was driven by significant losses across sectors such as banking, energy, utilities, and major retail, as markets evaluated the implications of a new tax bill on government spending and interest rates. Notably, state-owned Petrobras experienced a 1.5% fall, attributed to a continued decrease in oil and gasoline prices, as benchmarks for refined fuels hit multi-year lows due to abundant supply and reduced global demand. The utilities sector also suffered, with Eletrobras and Sabesp seeing declines of approximately 1.0% and 2.6%, respectively. Politically, Congress has passed a bill that exempts individuals earning up to R$5,000 monthly from income tax. This legislation is pending further review by the Senate and requires the president’s approval. Meanwhile, banks and retailers saw declines as interest rate futures increased, despite assurances from the bill's sponsor that the proposed tax cuts would be counterbalanced by increased taxes on the affluent and foreign exchange transactions.