FX.co ★ Ibovespa Falls on Fiscal Concerns and Weak Corporate Results

On Thursday, the Ibovespa index declined by 0.7%, dipping below the 136,000 mark. This downturn was influenced by tempered expectations of interest rate cuts from the Federal Reserve and underwhelming corporate earnings. In Brazil, fiscal concerns were heightened due to the introduction of the "Sovereign Brazil" initiative and a significant R$30 billion credit provision for businesses, leading to an increase in long-term interest rates. Economic data revealed that the services sector grew by 0.3% in June, reaching a new peak and surpassing predictions. Corporate earnings significantly affected market dynamics: Casas Bahia recorded a second-quarter net loss of R$555 million, a stark contrast to the previous year's R$37 million profit, leading to a 6.7% decline in its stock. JBS experienced a 3.6% drop, with its adjusted EBITDA down by 7.4% to US$1.75 billion, pressured by U.S. tariffs impacting meat exporters. Raízen reported a R$1.8 billion loss for the first quarter of the 2025/26 crop year, compared to a R$1.1 billion profit in the prior year. Additionally, Petrobras saw a 0.9% decrease, Vale fell 1.6%, and Itaú Unibanco dropped by 1%.