The Brazilian stock market began December on a downward trajectory, driven by challenges in the banking sector and ongoing fiscal concerns. On Monday, the Ibovespa index fell by 0.34%, closing at 125235.54 points.
Meanwhile, the dollar reached a new nominal record against the real, closing the session at R$6,065, marking an increase of 1.13% and setting a new level for the fourth consecutive session since the real began.
Domestically, investors are reacting to proposed cuts in public spending. President Luiz Inácio Lula da Silva met with Finance Minister Fernando Haddad, Institutional Relations Minister Alexandre Padilha and congressional leaders to discuss progress on the fiscal package.
This meeting started at 16:30 Brazilian time. Economic forecasts are also changing. Economists have raised their forecasts for Brazil’s key interest rate, the Selic, according to the Central Bank’s Focus Bulletin.
They predict it will reach 12.63% in 2025 and 10.50% in 2026. Despite worsening fiscal conditions, the projection for this year remains at an annual rate of 11.75%.
Gabriel Galípolo, Director of Monetary Policy and incoming president of the Central Bank indicated that current economic conditions call for a more contractionary monetary policy.
Speaking at the XP Policy Forum in São Paulo, he suggested that higher interest rates could continue for longer in Brazil. In terms of stock performance within the Ibovespa, SLC Agrícola stood out positively with shares rising around 8%.
Brazil’s stock market sees mixed performance
This increase followed an upgrade from neutral to buying by Bank of America and was boosted by the dollar’s strength against the real. Braskem also saw significant gains after announcing potential leadership changes under new CEO Roberto Ramos.
Conversely, Azul and LWSA led declines. Azul’s shares were pressured by rising fuel costs due to the stronger dollar. LWSA continued its downtrend as Citi downgraded its recommendation from buy to neutral/high risk.
Heavyweights such as Vale benefited from the positive performance of iron ore in China, with prices rising 1.26% to $111.28 on the Dalian Commodity Exchange.
Petrobras also finished slightly higher despite steady oil prices. However, banks fell collectively, with Bradesco down nearly 2%. In contrast, US markets set new intraday highs supported by tech stocks boosted by Cyber Monday sales.
Investors are anticipating a number of economic reports this week, including the official November employment report due on Friday.
Closing numbers for New York indexes were as follows: the S&P 500 rose 0.24% to 6,047.15 points; Dow Jones fell by 0.29% to 44,782 points; The Nasdaq rose 0.97% to a record high of 19,403.95 points.
