28.07.202620:59:25UTC+00Ibovespa Gains as BCB Rate Cut Bets Grow

The Ibovespa advanced 0.7% on Tuesday, closing at 176,565 points, after Brazil’s mid-July inflation report came in softer than expected. Annual inflation eased to 4.52%, below the market consensus of 4.67% and down from 4.8% in June. The weaker print, following June’s also-lower-than-expected data, strengthened expectations for a 25-basis-point cut to the Selic rate next week.

Financials led the gains: Banco do Brasil rose 1.6%, while B3 climbed 1.8%. Bradesco (+0.3%) and Santander (+2.2%) are scheduled to release their quarterly results on Wednesday. Utilities also advanced, with Axia up 1.9%. Ambev added 1.5% ahead of its earnings report due on Thursday.

In the industrial segment, WEG extended its recent rally, gaining 0.6% after Goldman Sachs upgraded the stock to Neutral from Sell, citing more balanced market expectations.

On the downside, telecoms weighed on the index. Vivo dropped 6.3% and TIM fell 5.8% after releasing their results. TIM’s mobile service revenue growth slowed to its weakest pace since 2021, while Vivo reported an 8% increase in depreciation and amortization expenses.