Ibovespa Falls on Inflation and GDP Outlook

The Ibovespa fell over 0.5% to hover below 208,000 on Tuesday, weighed down by losses in major banks, utilities and mining stocks. The Focus survey raised its 2026 inflation forecast to 5.22% from 5.01%, marking a fourth consecutive increase, while the Selic benchmark rate remained unchanged at 13.25%. The IMF also lowered its growth projections for Brazil, cutting its 2026 GDP growth estimate to 2.2% from 2.4%. The fund attributed the slowdown expected between 2026 and 2027 to restrictive interest rates aimed at bringing inflation back to target, the withdrawal of fiscal stimulus and global uncertainty. Major banks declined, with Itaú down nearly 1.5% and Bradesco losing about 1%. Utilities also fell, with Sabesp down nearly 2%. Miners weakened as abundant global supply, elevated Chinese inventories and lower shipping costs continued to pressure iron ore prices. Vale shed nearly 1%.