19.03.202614:03:42UTC+00Ibovespa Plunges as BCB Rate Cut Comes Below Forecasts

The Ibovespa fell 1.5% to the 177,000 level on Thursday after escalating conflict in the Middle East and its inflationary effects led Brazil’s central bank to abandon its guidance for further rate cuts this year. The BCB delivered a 25 bps cut—half the previously expected 50 bps—and warned that war-driven increases in energy and commodity prices are pushing inflation projections away from the 3% target, leaving the interest-rate outlook uncertain. Major banks retreated, with Itaú down more than 1.6% and Bradesco over 2.6%. Utilities also weakened, as Axia slipped 2.4%. Vale lost more than 3%, tracking a drop in Chinese iron ore prices after restrictions on a state buyer were eased. By contrast, Petrobras advanced over 1% as oil prices extended their rally. Elsewhere, Eneva rose nearly 2% after securing 5 GW in an auction and announcing R$18.2 billion in new gas hub investments.