The Ibovespa closed higher on Tuesday, reaching new record highs, supported by the gains in Wall Street and the drop in US Treasury yields, as well as Brazil’s improved sovereign rating by S&P. The benchmark index of the Brazilian stock market, the Ibovespa, rose 0.59%, to 131,850.9 points, a new closing record.
It reached a new intraday high of 132,046.93 points and a low of 131,085.81 points. The total trading volume was 20.6 billion reais, below the daily average for December, which was 28.2 billion reais.
Brazilian stocks continue to be supported mainly by foreign capital inflows into the São Paulo Stock Exchange, amid expectations that the monetary tightening in the United States is over and that the Federal Reserve will start reducing interest rates in 2024.
According to data from B3, foreign investors purchased 9.6 billion reais worth of stocks in December until the 15th, and the balance was positive at 21 billion reais in November.
A Bank of America survey of fund managers in Latin America also confirms this trend, with 48% of respondents expecting the Ibovespa to reach above 140,000 points by the end of next year, up from 16% in the previous month.
In the afternoon, the Brazilian market received more good news with S&P raising Brazil’s credit rating to “BB” with a stable outlook, citing the approval of the tax reform. In the afternoon session, the National Congress also approved the Budget Guidelines Law (LDO) for 2024, outlining the general guidelines for the budget, including a zero primary deficit target for next year.
The second trading day of the week also saw the release of the minutes from the last interest rate decision by the Central Bank, in which the monetary authority reinforced the scenario of 0.50 percentage point rate cuts in the upcoming meetings.