Ibovespa closes with a slight gain amid inflation data and concerns about tariffs.
Trading volume totaled R$36 billion, in a session also marked by the expiration of Ibovespa options on the São Paulo stock exchange.
SAO PAULO (Reuters) - The Ibovespa closed with a modest gain on Wednesday, with investors balancing inflation figures in the United States and Brazil with persistent concerns about US trade policy, while Azzas 2154 plummeted after the fashion group reported falling margins at the end of 2024.
The Ibovespa, the benchmark index of the Brazilian stock market, rose 0,29% to 123.863,5 points, having reached a low of 122.969,29 points and a high of 124.048,45 points during the day.
Trading volume totaled R$36 billion, in a session also marked by the expiration of Ibovespa options on the São Paulo stock exchange.
In the U.S., the Consumer Price Index (CPI) rose 0,2% last month, from 0,5% in January, according to the Labor Department, while market expectations pointed to a 0,3% increase. In the 12 months to February, the rate stood at 2,8%, compared to a forecast of 2,9%.
In Brazil, the IPCA (Consumer Price Index) rose 1,31% in February, after advancing 0,16% in January. Despite being in line with expectations in a Reuters poll (+1,30%), it was the highest monthly rate since March 2022 (1,62%) and the strongest result for a February since 2003 (1,57%).
Over 12 months, the IPCA (Brazilian consumer price index) rose 5,06%, from 4,56% in the previous month and a forecast of 5,05%. This is the first time the rate in this measurement has been above 5% since September 2023 (5,19%), going further beyond the ceiling of the official target -- 3,0% with a margin of 1,5 percentage points above or below.
According to Anderson Silva, head of the equity trading desk and partner at GT Capital, uncertainties surrounding the trade war launched by President Donald Trump continue to weigh on investor sentiment, amid fears of a recession in the US economy.
On Wednesday, increased tariffs on steel and aluminum imports by the US came into effect. Brazil is the second largest exporter of steel to the US, and the government will assess possible actions in the field of foreign trade in response, without immediate retaliatory measures.
HIGHLIGHTS
- AZZAS 2154 ON shares plummeted 13,39% after its fourth-quarter earnings report showed recurring net income of R$168,9 million, a 35,8% year-over-year decrease, as well as a drop in margins. According to analysts at Safra, it was a negative quarter for Azzas, with recurring profitability heavily pressured by efforts to normalize inventories, among other factors.
- VALE ON shares fell 1,25% on a day of weakness in iron ore futures in China, where the most traded contract in Dalian fell 0,32%, with traders also watching the entry into force of US steel tariffs. UBS BB analysts cut the target price for the miner's ADRs to US$10,50 from US$11,50 and reiterated their neutral recommendation.
- COGNA ON advanced 4,24% ahead of the release of its fourth-quarter results after the close of the Brazilian market on Wednesday. Morgan Stanley also raised its recommendation for the shares to "overweight," with a target price of R$2, compared to R$1,7 previously, according to a report dated the previous day. In the sector, YDUQS ON rose 0,38%.
- PETROBRAS PN closed stable on a day of rising oil prices abroad, where the price of Brent crude ended the day trading up 2%.
- ITAÚ UNIBANCO PN ended with a positive variation of 0,31%, on a day marked by the government's launch of a program for private sector workers to access payroll-deducted loans guaranteed by FGTS (Brazilian employee severance fund) resources. In the sector, BRADESCO closed stable, BANCO DO BRASIL ON lost 0,4%, and SANTANDER BRASIL UNIT It increased by 0,12%.
- CSN ON advanced 0,36% ahead of the release of its earnings report for the last three months of 2024, which will be released after the market closes, with investors also analyzing the potential impact of US tariffs on imported steel that came into effect on Wednesday. UBS BB also initiated coverage of the company's shares with a sell recommendation and a target price of R$7,50.
- XP, which is traded in New York, fell 5,48%, against the backdrop of a negative report from a US research firm about the group. In a statement, XP said it had become aware of "false, incorrect and inaccurate information" about the company released by Grizzly Research and that it will take legal action against the firm.
