Ibovespa Falls Below 119,000 Points on Mixed Economic Data

Brazil’s Ibovespa index dropped 0.77% to 118,856.48 points on January 10, 2025, following key economic releases.

The benchmark maintained a weekly gain of 0.27% despite pressure from Brazil’s IPCA inflation data and stronger-than-expected U.S. employment figures. Foreign investors withdrew R$3.04 billion ($490 million) from Brazilian stocks in 2025’s first week.

Brazil’s December IPCA inflation rose 0.52%, pushing the full-year rate to 4.83%, above the central bank‘s 3% target but within the 4.5% tolerance limit.

Food and beverage prices surged 7.62% annually, driving inflation higher. Meanwhile, U.S. payrolls added 256,000 jobs in December, exceeding the expected 165,000, keeping unemployment steady at 4.1%.

Market reactions varied across sectors. Oil companies gained, with Petrobras (PETR3; PETR4), Brava Energia (BRAV3), and Prio (PRIO3) rising on higher crude prices.

Ibovespa Falls Below 119,000 Points on Mixed Economic Data. (Photo Internet reproduction)

Retail stocks Lojas Renner (LREN3) and Casas Bahia (BHIA3) declined after inflation data. Airlines Azul (AZUL4) and Gol (GOLL4) fell amid dollar strength and rising fuel costs.

The Brazilian real weakened to R$6.10 ($1), up nearly 1% following the U.S. jobs data. Analysts expect the currency to stabilize around R$6.00 ($1) by year-end, though fiscal policy concerns persist.

Brazil’s economic growth is expected to slow in 2025, with the central bank potentially considering further rate hikes to combat inflation pressures.

Looking ahead, market sentiment remains cautious as Brazil navigates both domestic challenges and global economic headwinds. The recent outflow of foreign capital highlights ongoing investor concerns.

In short, mixed sector performance reflects the complex interplay of inflation, currency movements, and international market dynamics.