On Monday, the Ibovespa index dipped by 0.4% to 143,608 points as heightened fiscal concerns, new corporate disruptions, and a scarcity of crucial information prompted investors to reassess the perceived risk associated with Brazilian investments. Discussions around increasing income tax exemptions and suggestions for complimentary urban transit services sparked fears of escalating deficits and increased borrowing requirements, leading to higher risk premiums. Concurrently, the partial shutdown of the US government intensified the uncertainty by delaying critical macroeconomic reports and clouding the Federal Reserve's schedule, thereby forcing market players to depend on incomplete data amidst growing risk premiums.
The impact was felt across various sectors, with notable declines in companies such as WEG (-2%), Banco Santander (-0.8%), and Suzano (-2.4%). In contrast, Vale saw a 2.2% rise driven by investments in iron ore, and Embraer experienced a 1.9% increase following the sale of four aircraft to Sweden. The Central Bank's Focus Survey indicated a slight downward revision in inflation expectations; however, this positive development was insufficient to counterbalance the immediate fiscal and corporate challenges.
