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Ibovespa Retreats To 131,000 Points Amid Global Economic Uncertainties
(MENAFN- The Rio Times) Brazil's primary stock index, the Ibovespa, experienced a downturn on Wednesday, September 25, 2024, closing at 131,586.45 points.
The index fell 0.43% despite earlier gains supported by positive economic signals from China. Concurrently, the US dollar strengthened against the Brazilian real, ending the session at R$ 5.4761, up 0.24%.
Investors closely monitored the release of the National Consumer Price Index-15 (IPCA-15), Brazil's official inflation preview. The index rose 0.13% in September, lower than August's 0.19% and below market expectations.
Itaú bank analysts noted the data came in significantly below their forecast, with a better-than-expected breakdown, particularly in underlying services.
Luciana Rabelo, an economist at Itaú , commented on the inflation data. She highlighted that labor-related and out-of-home food services remained stable despite a tight labor market.
This development provided a positive outlook for Brazil's economic landscape. Brazil's current account deficit widened more than anticipated in August, reaching US$ 6.589 billion.
The 12-month accumulated deficit totaled 1.75% of the Gross Domestic Product. This result surpassed market expectations of a US$ 5.25 billion deficit for August, indicating potential economic challenges ahead.
The meatpacking sector drew attention as Brazil's antitrust regulator, CADE, approved Marfrig's asset sale to Minerva with certain restrictions.
As part of the deal, Minerva must sell its currently inactive plant in Pirenópolis, Goiás. Marfrig's shares (MRFG3) rose nearly 2% following the announcement.
The deal is expected to conclude by the end of October, potentially reshaping the competitive landscape in Brazil's meat industry.
Braskem (BRKM5) led the Ibovespa 's gains, jumping over 4% near the end of trading. CSN Mineração (CMIN3) and Vale (VALE3) also performed well, supported by rising iron ore prices.
Market Movements
Iron ore futures in China climbed more than 4% following stimulus announcements. The most-traded January iron ore contract on the Dalian Commodity Exchange closed up 4.19% at 709 yuan (US$101.02) per tonne.
On the downside, Brava Energia (BRAV3) erased previous gains, affected by falling oil prices. Oil prices dropped more than 2% due to concerns about demand and expectations of resumed production in Libya.
Petrobras (PETR4; PETR3) closed slightly higher, bucking the commodity's trend. Assaí (ASAI3) shares declined after Citi downgraded its recommendation from buy to neutral/high risk.
In the United States, investors remained cautious ahead of new inflation data. Wall Street experienced volatility as markets awaited the release of the Personal Consumption Expenditures (PCE) Price Index for August.
The PCE is the Federal Reserve's preferred inflation indicator. This anticipation reflected the ongoing global focus on inflationary pressures and monetary policy.
The major U.S. stock indices closed mixed. The S&P 500 fell 0.19% to 5,722.26 points, while the Dow Jones Industrial Average dropped 0.70% to 41,914.75 points.
In addition, the tech-heavy Nasdaq Composite managed a slight gain of 0.04%, closing at 18,082.21 points.
As global economic uncertainties persist, investors continue to navigate a complex landscape of inflation concerns, monetary policy shifts, and geopolitical tensions.
The Brazilian market's performance reflects these broader trends, with domestic factors adding nuance to the overall picture.
The index fell 0.43% despite earlier gains supported by positive economic signals from China. Concurrently, the US dollar strengthened against the Brazilian real, ending the session at R$ 5.4761, up 0.24%.
Investors closely monitored the release of the National Consumer Price Index-15 (IPCA-15), Brazil's official inflation preview. The index rose 0.13% in September, lower than August's 0.19% and below market expectations.
Itaú bank analysts noted the data came in significantly below their forecast, with a better-than-expected breakdown, particularly in underlying services.
Luciana Rabelo, an economist at Itaú , commented on the inflation data. She highlighted that labor-related and out-of-home food services remained stable despite a tight labor market.
This development provided a positive outlook for Brazil's economic landscape. Brazil's current account deficit widened more than anticipated in August, reaching US$ 6.589 billion.
The 12-month accumulated deficit totaled 1.75% of the Gross Domestic Product. This result surpassed market expectations of a US$ 5.25 billion deficit for August, indicating potential economic challenges ahead.
The meatpacking sector drew attention as Brazil's antitrust regulator, CADE, approved Marfrig's asset sale to Minerva with certain restrictions.
As part of the deal, Minerva must sell its currently inactive plant in Pirenópolis, Goiás. Marfrig's shares (MRFG3) rose nearly 2% following the announcement.
The deal is expected to conclude by the end of October, potentially reshaping the competitive landscape in Brazil's meat industry.
Braskem (BRKM5) led the Ibovespa 's gains, jumping over 4% near the end of trading. CSN Mineração (CMIN3) and Vale (VALE3) also performed well, supported by rising iron ore prices.
Market Movements
Iron ore futures in China climbed more than 4% following stimulus announcements. The most-traded January iron ore contract on the Dalian Commodity Exchange closed up 4.19% at 709 yuan (US$101.02) per tonne.
On the downside, Brava Energia (BRAV3) erased previous gains, affected by falling oil prices. Oil prices dropped more than 2% due to concerns about demand and expectations of resumed production in Libya.
Petrobras (PETR4; PETR3) closed slightly higher, bucking the commodity's trend. Assaí (ASAI3) shares declined after Citi downgraded its recommendation from buy to neutral/high risk.
In the United States, investors remained cautious ahead of new inflation data. Wall Street experienced volatility as markets awaited the release of the Personal Consumption Expenditures (PCE) Price Index for August.
The PCE is the Federal Reserve's preferred inflation indicator. This anticipation reflected the ongoing global focus on inflationary pressures and monetary policy.
The major U.S. stock indices closed mixed. The S&P 500 fell 0.19% to 5,722.26 points, while the Dow Jones Industrial Average dropped 0.70% to 41,914.75 points.
In addition, the tech-heavy Nasdaq Composite managed a slight gain of 0.04%, closing at 18,082.21 points.
As global economic uncertainties persist, investors continue to navigate a complex landscape of inflation concerns, monetary policy shifts, and geopolitical tensions.
The Brazilian market's performance reflects these broader trends, with domestic factors adding nuance to the overall picture.
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