The Ibovespa was little changed above the 176,000 mark on Wednesday as investors digested Brazil’s latest inflation figures and tracked developments in the Middle East. Brazil’s mid-month inflation rate accelerated to 4.64% in May from 4.37% in April, exceeding market expectations of 4.55% and strengthening the view that the central bank may keep interest rates higher for longer.
At the same time, oil prices retreated amid optimism that the United States and Iran could ultimately reach a peace agreement, despite renewed hostilities and ongoing uncertainty around the Strait of Hormuz. The easing of energy-driven inflation concerns supported banking stocks, with Itaú and Bradesco advancing more than 1.5%. WEG also moved higher, while Ambev climbed 1% after Brazil’s industrial confidence reached its highest level in a year.
Vale added 1% despite weaker iron ore prices, whereas Petrobras fell nearly 2% in response to the drop in crude prices.