The Ibovespa rose 1.3% this Tuesday (1st), reaching its highest level in nearly four months as it closed at 179,722.48 points. The gain was driven by rising oil prices on the international market and a weaker dollar, which closed at R$ 5.153, down 0.54% on the day.
The dollar has fallen 6.12% so far this year. During the morning, the currency rose as high as R$ 5.20 after the release of Brazil’s second-quarter Gross Domestic Product (GDP), which showed slowing economic growth, reinforcing the possibility of further cuts to the benchmark interest rate, the Selic, currently at 14% a year.
Although the initial rise reduced appetite for Brazilian assets due to the prospect of lower interest rates, the US currency lost steam and turned lower, following the movement of other emerging-market currencies and oil prices. At around 2:20 p.m., the dollar was trading as low as R$ 5.13.
Petrobras and the oil sector in the spotlight
Among the stocks that contributed most to the index’s gain were shares of Petrobras. The state-controlled company’s preferred shares rose 4.11%, while its common shares gained 4.14%. WTI crude reached US$ 90.22 per barrel, up 5.2%, and November Brent closed at US$ 94.65, a gain of 4.6%.
The 13.9% increase in the average price of jet fuel (QAV) announced by Petrobras also caught the market’s attention. Brazilian oil production hit a record in July, reaching 4.5 million barrels per day, according to data from the National Agency of Petroleum, Natural Gas and Biofuels (ANP).
Economic highlights and foreign capital flows
Second-quarter GDP grew 0.5% from the previous three months, slowing compared with the first quarter, when growth was 1.1%. Lower household consumption and a slower pace in industry were cited as factors behind the loss of momentum.
This context reinforces market expectations for further Selic cuts, which could affect the attractiveness of foreign investment. In fact, in August, through the 28th, there was a net outflow of nearly R$ 18.6 billion in foreign capital from the Brazilian stock market, including R$ 130 million in the last session of the month alone.
International context and impact on markets
While the Ibovespa performed well, US indexes closed lower. The S&P 500 fell 0.71% amid rising US Treasury yields, driven by a global sell-off in those securities.
Oil rallied strongly due to intensifying conflict between the United States and Iran, including new American strikes on Iranian targets. The situation heightened concerns about global supply, especially amid tension in the Strait of Hormuz region.
