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Ibovespa closes with 15th consecutive gain, driven by economic data.
The main index of the Brazilian stock exchange, the Ibovespa, closed Friday (14) at 157,739 points, registering its 15th consecutive rise, the longest sequence since 1994. The index accumulated a gain of 2.39% in the week, reflecting investor optimism with the slowdown in inflation and expectations of a cut in the basic interest rate, the Selic.
Inflation slows, reinforcing expectations of interest rate cuts.
In October, official inflation (IPCA) slowed to 0.09%, the lowest level for the month since 1998, accumulating an increase of 4.68% in the last 12 months, according to data released by IBGE. This more benign inflation scenario reinforced the perception that the Central Bank may begin cutting the Selic rate, currently at 15%, soon, after a prolonged period of maintaining high interest rates to contain prices.
Impacts on the economy and the financial market
The Ibovespa's strong performance was also supported by the fall of the dollar, which closed at 5.30, increasing the appetite for local assets. Furthermore, there was a reduction in the unemployment rate in two Brazilian states in the third quarter, according to IBGE, contributing to economic optimism.
However, the Ministry of Finance revised its 2025 GDP growth forecast downwards, from 2.31% to a more modest expansion, with inflation still above the target ceiling of 4.51% to 3% of the total. This shows that, despite the progress, the Brazilian economy still faces challenges, especially in controlling prices and stimulating sustainable growth.
Market outlook
Analysts indicate that, with the potential reduction of the Selic rate and stable inflation, the stock market may continue to show positive results in the coming months. The expectation is that the Brazilian stock market index will remain at high levels, attracting domestic and foreign investors given the favorable external environment and evolving monetary policies.
Photo by ELISA KERSCHBAUMER on Unsplash
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