FX.co ★ Ibovespa Falls as Political Risks Persist

The Ibovespa slipped 0.6% on Friday, closing at 187,207 points, as the ongoing crisis involving Brazil’s Supreme Federal Court continued to stoke political uncertainty and cloud the country’s economic outlook. Chief Justice Edson Fachin ordered Justice André Mendonça to lift, within 24 hours, the confidentiality on proceedings related to investigations into Banco Master. The probe includes alleged irregularities in the financing of the film “Dark Horse,” a case that could undermine Flávio Bolsonaro’s electoral prospects.

Investors generally regard Bolsonaro as more fiscally conservative, but concerns over political risk are intensifying just as high domestic interest rates and subdued business activity continue to pressure growth expectations. State-controlled financial stocks retreated, with Banco do Brasil down 1.4%, BB Seguridade off 4.1%, and Caixa losing 2.4%. The utilities sector also weakened, with Axia declining 1.6%.

CSN tumbled 7.4% as investors took profits after recent gains, though the stock still ended the week up 4.2% following a change in the company’s CEO. Despite Friday’s pullback, the Ibovespa advanced 1.1% over the week.