The Ibovespa edged down 0.2% to close at 136,866 on Friday to close the week 0.2% lower as a resurgence of fiscal uncertainty, elevated domestic discount rates and firmer US yields combined to dampen appetite for Brazilian equities.
The abrupt congressional repeal of the IOF surcharge, originally designed to bolster revenue, has reignited discussions over necessary primary-spending cuts and undermined confidence in near-term fiscal consolidation. Meanwhile, while Brazil’s labor market remains resilient with unemployment at 6.2% in the three months through May (better than the 6.4% consensus), sectoral performance was mixed: Petrobras underperformed, slipping about 1% on concerns over higher funding costs and regulatory headwinds, while heavyweight names such as Ambev, WEG and Rede D’Or each fell between 1% and 1.5%, reflecting broad-based caution across consumer staples, industrials and healthcare.
