The Ibovespa climbed nearly 1% on Wednesday, approaching the 176,000 level, supported by signs of easing inflation. Brazil’s inflation rate slipped to 4.25% in the first half of August from 4.44% in July, remaining comfortably below the central bank’s upper tolerance limit of 4.5%.
The weaker inflation print pushed bond yields lower and strengthened expectations for an imminent cut in the Selic benchmark interest rate. Financial stocks outperformed: Itaú and Itaúsa advanced around 1%, Bradesco gained more than 1.5%, and Banco do Brasil rose nearly 2%.
Utilities also moved higher, with Sabesp jumping more than 2.5% after Itaú BBA reiterated its buy recommendation, following the stock’s recent decline after its quarterly earnings release. In the commodities space, Vale added over 0.5% on the back of firmer iron ore prices.
In contrast, Petrobras slipped almost 0.5% as oil prices weakened after reports that Iran and Oman had discussed creating a “temporary joint maritime corridor” in the Strait of Hormuz.
