Brazilian Markets React To Hawkish Central Bank Signals As Petrobras Drags Ibovespa Lower

(MENAFN- The Rio Times) Brazil's Ibovespa benchmark index fell 0.65% to 125,147 points on Tuesday, marking its second consecutive decline this month, as Petrobras (PETR4) shares slumped over 1% amid weaker-than-expected Q4 2024 production data.

The dollar dropped 1.75% against the real to R$5.7724, extending its longest losing streak since the currency's 1994 launch. Reuters reports Petrobras produced 2.628 million barrels of oil equivalent per day (Mboed) in Q4 2024, down 10.5% year-over-year and 3.4% quarterly.

Total oil, gas, and fuel sales for 2024 fell 3.1% to 2.914 million barrels per day, fueling investor concerns. Analysts at BTG Pactual called the quarterly output“disappointing” but noted potential for recovery, citing operational adjustments.

Brazil's Central Bank amplified market tensions by releasing hawkish meeting minutes from its February 28 Copom session, which raised the Selic rate to 13.25% and signaled openness to further hikes.

Itaú BBA economists warned the tone prioritized inflation control over growth, predicting rates could hit 15.75% by year-end. Export-heavy firms like Suzano (SUZB3) and JBS (JBSS3) fell up to 2.5% as the dollar's slide eroded revenue projections.



Braskem (BRKM5) bucked the trend, rising 3% after Fitch Ratings affirmed its financial stability despite R$1.3 billion in provisions for geological risks in Alagoas. Wall Street rebounded from Monday's slump, with the Nasdaq climbing 1.35% as Palantir surged 26% on strong earnings.

Investors monitored U.S.-China trade tensions after Beijing imposed retaliatory tariffs on American energy products. President Trump stated he would engage China's Xi Jinping“at the appropriate time,” delaying immediate resolution hopes.

Market watchers now await Petrobras' full earnings report and the Central Bank's next move. Volatility is expected to persist as global trade uncertainties compound domestic fiscal pressures.

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