INSUBCONTINENT EXCLUSIVE:
The Ibovespa index took a significant hit, closing 1% lower at 128,188.34 points after the Central Bank of Brazil (Copom) trimmed the Selic
rate to 10.50% per annum.The reduction by 0.25 percentage points, down from 10.75%, surprised markets and signaled a cautious approach to
monetary easing.This slight rate cut amplified investor concerns, leaving many worried about future policy direction.The Brazilian real
mirrored this uncertainty as the dollar gained 1.01% against it, trading at R$5.14.Simultaneously, futures interest rates increased across
Despite some intraday recoveries, anxiety over inflationary and fiscal challenges dampened market sentiment.Ibovespa Slips After
Smaller-Than-Desired Selic Rate Cut
monetary easing.Members aligned with the current administration favored a smaller reduction, reflecting potential shifts in monetary policy
rate to fall to 10.25% in June before Copom temporarily halts easing
also dragged down the Ibovespa
Banco do Brasil shares fell by 4.37% despite exceeding profit expectations with a 20% return on equity.Lojas Renner lost 6.47%, citing
challenges from the Rio Grande do Sul floods.On the other hand, Casas Bahia and Magazine Luiza shares rose on better-than-expected earnings
and restructuring efforts.Fiscal sustainability concerns grew as the federal government rolled out a R$50.9 billion emergency aid package
closely watched to gauge how these monetary and fiscal actions affect the economy.Copom members continue to approach additional rate cuts
cautiously amid persistent market uncertainties.
