The Ibovespa tumbled 2.3% to 176,219 on Friday marking its fourth consecutive weekly decline amid intensifying Middle East conflict. This retreat represents a fundamental transition toward the pricing of global geopolitical shocks as the real plummeted and future interest rates rose broadly. Despite the BCB previously delivering a smaller than expected 25 basis point cut the outlook for further easing has darkened as war driven energy costs push inflation projections away from the 3% target. Major banks were decimated with Santander and Itaú Unibanco falling around 2% while B3 Sa Brasil Bolsa Balcao fell over 4%. Even commodity giants Vale and Petrobras were unable to escape the risk aversion falling 2.1% and 2.6% respectively as traders weighed the potential for prolonged disruption to global trade flows.
