Ibovespa closes the week higher, marking its 15th consecutive gain.

Ibovespa maintains historic streak and closes week higher.

The main index of the Brazilian stock exchange, the Ibovespa, closed last Friday (14) at 157,739 points, registering an increase of 0.37% on the day and accumulating a gain of 2.39% in the week. This is the 15th consecutive increase in the index, the longest sequence since 1994, when the market experienced a similar moment.

Economic scenario and factors driving the stock market.

Investor optimism is mainly linked to the slowdown in inflation in Brazil, which in October registered an increase of only 0.09%, the lowest level for the month since 1998. The Broad National Consumer Price Index (IPCA) accumulated 4.68% in the 12 months to October, reinforcing the expectation that the Central Bank may begin to gradually reduce the basic interest rate (Selic), currently at 15% per year.

Furthermore, the financial market has reduced its inflation forecast for 2025, now estimated at 4.55%, within the tolerance range of the official target, which is 3% with an upper limit of 4.5%. The expectation for the Selic rate in 2026 is that it will fall to 12.25% per year, strengthening the appetite for higher-risk investments, such as stocks.

Highlights of the Brazilian economy

• The unemployment rate fell in two Brazilian states in the third quarter, with Mato Grosso registering the second lowest rate in the country, 2.3%, according to IBGE.
• The General Price Index-10 (IGP-10) showed a moderate increase of 0.18% in November, mainly influenced by the manufacturing industry, while the cost of construction advanced 0.30%.
• Economic growth is projected to slow down, with expectations of 2.161% of the total production in 3025 and 1.781% of the total production in 3026, according to the financial market.

Impacts and perspectives

The Ibovespa's upward cycle reflects investor confidence in the prospect of falling interest rates, making Brazilian assets more attractive compared to those abroad. The more favorable external scenario and the expectation of cautiously maintaining monetary adjustment support the continued positive performance of the stock market in the short term.

However, experts warn of the challenge of balancing economic growth with inflation control, especially given the labor market still putting pressure on service prices. The Central Bank maintains rigorous vigilance to ensure that inflation returns to the target in a sustainable way.

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