FX.co ★ Ibovespa Falls on Inflation Concerns

The Ibovespa fell about 0.5% on Friday, slipping below 185,500, after the release of the second preview of September’s IGP-M inflation. Brazil’s General Price Index – Market rose 1.47% in this reading, reversing the 0.36% deflation seen in the same preview for August.

At the same time, oil prices advanced, recovering from a recent pullback as supply concerns persisted. Higher energy costs continue to fuel inflation pressures and, in turn, expectations of elevated borrowing costs.

Financials weighed on the index, with major banks trading lower: Banco do Brasil fell about 2%, while Bradesco declined more than 0.5%. Utilities also retreated, with Axia shedding nearly 1%.

Mining stocks moved down despite a rise in Chinese iron ore prices: CSN Mineração lost around 1.5%, and Usiminas slipped 1%. Cemig dropped close to 1% after JPMorgan reiterated its sell recommendation on the stock. Petrobras edged down nearly 0.5% even amid the rebound in oil prices.