Ibovespa Falls on Oil Rally and Political Uncertainty

The Ibovespa fell 0.9% to close at 185,501 on Monday amid a rebound in oil prices and persistent political uncertainty. Oil prices rose after Saudi Arabia shut down a crucial pipeline that bypasses the Strait of Hormuz. A diplomatic meeting between Iran and Gulf Arab states to discuss the situation in Hormuz, originally scheduled for Monday in Oman, was abruptly postponed following the pipeline attack. Renewed energy-driven inflationary pressures ahead of interest-rate decisions by the BCB and the Fed weighed on credit-sensitive stocks. Major banks posted losses, with Itaú down 0.9% and Bradesco down 1.4%. Utilities also closed lower, with Eneva losing 1.5%. Political uncertainty remained elevated amid the ongoing Supreme Court crisis, while new election polls confirmed the close race for the presidency between President Lula and Flávio Bolsonaro. Brazil’s stock-market volatility index jumped 5.24%. Vale fell 3.5% as iron ore prices in China closed lower.