Brazilian stock market hits record high and dollar falls.

The Brazilian stock market registered a new historical record this Tuesday (11), closing above 157 thousand points, while the dollar retreated to R$ 5.27. It is the 15th consecutive rise of the Ibovespa, the longest sequence since 1994, driven by expectations of falling interest rates and improved inflation.

Stock market performance and dollar

The Ibovespa closed at 157,748.60 points, rising 1.60% on the day. The index surpassed the 156,000, 157,000 and 158,000 point marks within minutes of opening, reaching its best level of the day at 158,467.21 points. The spot dollar fell 0.62%, closing at R$ 5.2746.

Economic expectations and data

Investor optimism is supported by the slowdown in inflation in October, which stood at 0.09% — the lowest level for the month since 1998. Over the past 12 months, the IPCA (Brazilian consumer price index) rose 4.68%, below analysts' expectations. PicPay's chief economist, Ariane Benedito, stated that the result confirms a more consistent disinflationary process, with downside surprises in administered goods and services.

Impacts and analyses

• Local investors remain wary of the rally, which is seen as disconnected from the country's fundamentals, such as high interest rates and political uncertainty.
• Some managers believe the momentum can continue, while others, such as UBS, point to better opportunities in technology in the US and Asia.
• External flows have sustained the increase, but experts warn that a change in this scenario could trigger rapid corrections.

Other highlights of the day

• The court has declared Oi bankrupt, ending the judicial reorganization process.
• Breweries are betting on the fourth quarter to recover volumes lost throughout the year.
• The Mater Dei hospital network recorded its highest EBITDA ever and improved cash flow generation.

Photo by ORLANDO SANT'ANNA on Unsplash