By Brazil Stock Guide – The Ibovespa (IBOV) closed slightly higher on Wednesday, lifted by bank stocks, though the index remained below the psychological threshold of 135,000 points. According to Investing.com, the modest recovery followed a sharp 2.1% decline in the previous session, its steepest correction since early April.
At its peak intraday, the index reached 134,963.84 points before losing momentum, ending the day up 0.17% at 134,666.46. Trading volume was muted at R$16.2 billion. So far this week, the Ibovespa is down 1.23%, trimming its monthly gain to 1.20%. Year-to-date, it still shows an advance of 11.96%.
Banks stage partial recovery
Financial stocks, which had been hit hard on Tuesday amid renewed concerns over Brazil–U.S. relations, posted only a limited rebound. Banco Santander Brasil SA (SANB11.SA) led gains with a 2.08% rise, while Banco do Brasil SA (BBAS3.SA) gained 0.30% and Itaú Unibanco Holding SA (ITUB4.SA) ended nearly flat at +0.06%. Bradesco SA (BBDC3.SA, BBDC4.SA) advanced 0.44% and 0.32% on its common and preferred shares, respectively, while BTG Pactual Group (BPAC11.SA) slipped 1.10%.
Pedro Moreira, partner at One Investimentos, said investor sentiment remains cautious: “From a technical standpoint, there is uncertainty about how banks will navigate the ruling by Minister Flávio Dino and the provisions of the U.S. Magnitsky Act. In an extreme scenario, sanctions from the U.S. on Brazilian banks would be devastating.”
Market movers
Among the top performers, Grupo Pão de Açúcar (PCAR3.SA) surged 8.62%, followed by Ultrapar Participações SA (UGPA3.SA), up 4.35%, and Auren Energia SA (AURE3.SA), which added 4.05%. On the losing side, Azzas Investimentos SA (AZZA3.SA) fell 3.42%, Marfrig Global Foods SA (MRFG3.SA) dropped 3.16%, and Rumo SA (RAIL3.SA) slid 3.11%.
In commodities, Vale SA (VALE3.SA) slipped 0.45%. Petrobras (PETR3.SA, PETR4.SA) gained 0.83% and 0.60% on its common and preferred shares, respectively, tracking a 1.5% increase in crude oil prices in London and New York.
U.S. pressure weighs on sentiment
Roberto Simioni, chief economist at Blue3 Investimentos, emphasized that Brazil is facing dual U.S. pressures: steep tariffs and the extraterritorial application of the Magnitsky Act, which recently sanctioned Supreme Court Justice Alexandre de Moraes. “The measure by Minister Flávio Dino reinforces Brazil’s sovereignty and the Supreme Court’s exclusive jurisdiction over foreign norms,” Simioni said. However, he warned that such moves could heighten tensions, reduce foreign investor confidence, increase legal risks for banks with international operations, and raise capital costs for Brazilian firms.