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Brazil's Ibovespa Hits 184,691 As Foreign Inflows And Softer Inflation Keep The Rally Alive
(MENAFN- The Rio Times) Key Points
Brazil's Ibovespa extended its record run on Wednesday, closing up 1.52% at 184,691.05 and briefly pushing above 185,000 intraday.
The dollar ended essentially flat at 5.2066 reais per $1, keeping the currency near its strongest levels since May 2024. The day's domestic catalyst was inflation.
The IPCA-15 rose 0.20% in January, below the 0.23% consensus, with the 12-month reading at 4.50%. That reinforced the market's core thesis: policy rates are high, but the next move could be down.
Investors spent the session waiting for the Central Bank 's Copom decision, with the base case still a Selic hold at 15% and growing debate about how soon cuts start.
The external backdrop was mixed but supportive. The Federal Reserve held rates at 3.50% to 3.75% and two officials dissented in favor of a cut, a detail that traders read as a potential pivot point later in the year.
U.S. equities finished near flat, while Europe slipped and Asia was stronger, leaving Brazil to trade mainly on rates, flows, and big index names.
Foreign Inflows Drive Overheated Rally
Foreign money remained the story. B3 data cited in market coverage put year-to-date foreign inflows at US$17.7 billion, including US$2.0 billion on Friday alone.
That flow has disproportionately lifted the index's heavyweights and the more beaten-down cyclicals that benefit most from falling yields.
Top winners were Raízen (RAIZ4) +20.00% to R$1.08 ($0.21), C&A (CEAB3) +8.60% to R$12.50 ($2.40), Usiminas (USIM5) +6.57% to R$6.97 ($1.34), Magazine Luiza (MGLU3) +4.56% to R$10.08 ($1.94), and IRB (IRBR3) +4.44% to R$60.19 ($11.56).
Top losers were Embraer (EMBJ3) -3.53% to R$99.77 ($19.16), CPFL (CPFE3) -2.84% to R$53.05 ($10.19), Marfrig (MRBF3) -2.51% to R$19.03 ($3.65), Braskem (BRKM5) -2.41% to R$9.71 ($1.86), and WEG (WEGE3) -2.14% to R$51.57 ($9.91).
Technically, the market is still in a powerful uptrend, but it is overheated. Your 4-hour chart shows RSI around 83 with MACD still positive but the histogram no longer expanding as fast.
The daily RSI is near 86 and the weekly RSI near 84, consistent with a parabolic phase where dips get bought until they suddenly do not. First support sits near 181,830, then 177,850. If the rally stumbles, those levels matter quickly.
A new record close came as Brazil's inflation preview surprised on the low side and the dollar held near multi-year lows.
Heavyweights and high-beta names led again, while a few crowded winners finally corrected.
Charts still point up, but momentum is now extreme and the risk of a sharp air pocket is rising.
Brazil's Ibovespa extended its record run on Wednesday, closing up 1.52% at 184,691.05 and briefly pushing above 185,000 intraday.
The dollar ended essentially flat at 5.2066 reais per $1, keeping the currency near its strongest levels since May 2024. The day's domestic catalyst was inflation.
The IPCA-15 rose 0.20% in January, below the 0.23% consensus, with the 12-month reading at 4.50%. That reinforced the market's core thesis: policy rates are high, but the next move could be down.
Investors spent the session waiting for the Central Bank 's Copom decision, with the base case still a Selic hold at 15% and growing debate about how soon cuts start.
The external backdrop was mixed but supportive. The Federal Reserve held rates at 3.50% to 3.75% and two officials dissented in favor of a cut, a detail that traders read as a potential pivot point later in the year.
U.S. equities finished near flat, while Europe slipped and Asia was stronger, leaving Brazil to trade mainly on rates, flows, and big index names.
Foreign Inflows Drive Overheated Rally
Foreign money remained the story. B3 data cited in market coverage put year-to-date foreign inflows at US$17.7 billion, including US$2.0 billion on Friday alone.
That flow has disproportionately lifted the index's heavyweights and the more beaten-down cyclicals that benefit most from falling yields.
Top winners were Raízen (RAIZ4) +20.00% to R$1.08 ($0.21), C&A (CEAB3) +8.60% to R$12.50 ($2.40), Usiminas (USIM5) +6.57% to R$6.97 ($1.34), Magazine Luiza (MGLU3) +4.56% to R$10.08 ($1.94), and IRB (IRBR3) +4.44% to R$60.19 ($11.56).
Top losers were Embraer (EMBJ3) -3.53% to R$99.77 ($19.16), CPFL (CPFE3) -2.84% to R$53.05 ($10.19), Marfrig (MRBF3) -2.51% to R$19.03 ($3.65), Braskem (BRKM5) -2.41% to R$9.71 ($1.86), and WEG (WEGE3) -2.14% to R$51.57 ($9.91).
Technically, the market is still in a powerful uptrend, but it is overheated. Your 4-hour chart shows RSI around 83 with MACD still positive but the histogram no longer expanding as fast.
The daily RSI is near 86 and the weekly RSI near 84, consistent with a parabolic phase where dips get bought until they suddenly do not. First support sits near 181,830, then 177,850. If the rally stumbles, those levels matter quickly.
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