Brazil Stocks Drop As Trade Fears Collide With Brazil's Fiscal Jitters

2025-10-11 05:00:26

(MENAFN- The Rio Times) Brazil's market sold off Friday, joining a global risk aversion wave after fresh U.S. tariff threats against China rattled growth hopes.

The Ibovespa fell 0.73% to 140,680.34, taking the week's loss to 2.45%. Turnover was about R$22.5 billion ($4.25 billion).

The story behind the story is a double shock. Externally, a revived U.S.–China trade confrontation pushed investors out of cyclicals worldwide, with Wall Street and major Asian and European bourses dropping in tandem.

Internally, Brazil's risk premium widened on budget uncertainty after talk of a 2026 stimulus“package” near R$100 billion ($18.87 billion) and a new mortgage policy for middle-income borrowers.

That mix-stronger dollar, higher fiscal noise-pressured banks and domestic demand plays while favoring exporters with dollar revenues.

Oil and metals added cross-currents. Petrobras eased alongside softer crude, and Vale tracked the broader de-risking tied to China headlines.

Steelmakers whipsawed after a Minas Gerais court pressed the antitrust watchdog to quantify a penalty in the long-running CSN–Usiminas case, reviving legal overhangs at an awkward moment.

Top Winners

Engie Brasil (EGIE3) +1.45% - defensive cash generation and dividends drew buyers
Minerva (BEEF3) +1.08% - FX tailwind for beef exports
Suzano (SUZB3) +1.05% - stronger dollar lifts pulp pricing in reais
Lojas Renner (LREN3) +1.01% - selective bargain-hunting in quality retail
Hypera (HYPE3) +0.86% - resilient healthcare cash flows

Top Losers

CSN (CSNA3) −6.06% - legal risk in Usiminas case intensified
Hapvida (HAPV3) −6.02% - healthcare underperformed in risk-off tape
Braskem (BRKM5) −3.83% - petrochemicals tracked FX and oil volatility
CSN Mineração (CMIN3) −3.67% - iron-ore and group spillover
PRIO (PRIO3) −3.38% - E&P names fell with crude

Technical snapshot: After September's records, the Ibovespa has slipped into a corrective regime.

On the four-hour chart, momentum stays heavy below 143,300–144,700; support lies near 141,000 and 139,300. A sustained reclaim of 146,000 would be needed to rebuild a run at prior highs.

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