FX.co ★ Ibovespa Rises Following Election Polls

The Ibovespa advanced 1% on Monday, closing at 177,419 points, supported by the release of new presidential election polls. The BTG/Nexus survey showed President Lula with 46% of voting intentions in a potential runoff against Flávio Bolsonaro, who registered 45%, indicating a technical tie. Markets tend to view Bolsonaro as the more fiscally conservative candidate, a key consideration in an environment of elevated domestic interest rates and subdued business activity.

A separate poll by AtlasIntel/Bloomberg showed Lula with 47.1% and Bolsonaro with 42.6%, narrowing Lula’s lead to 4.5 percentage points from 6.3 points in July. On the fiscal front, general government gross debt climbed to 82.5% of GDP in July. Even so, the government continues to target a primary surplus of 0.1% of GDP in 2027. Finance Minister Durigan argued for reinforcing the current fiscal framework and indicated that some social programs might cease to be classified as “mandatory.”

In corporate moves, major banks rallied, led by Banco do Brasil, which gained 2.8%. Petrobras climbed 3.4% as oil prices rebounded. Despite Monday’s gains, the Ibovespa ended August down 0.3%.