28.10.202613:53:40UTC+00Brazilian Stocks Extend Losses Amid Fiscal Uncertainty

The Ibovespa fell nearly 2% on Wednesday, slipping below the 173,000 mark and extending losses for a third straight session, to its lowest level in roughly two months. Investors continued to digest the implications of President Lula’s election victory, amid mounting concerns over the country’s fiscal outlook and uncertainty about the makeup of the new economic team.

Banking shares were under pronounced pressure. Santander sank 4% after reporting a 28% year-on-year drop in recurring managerial net income. Other major financials also declined: Bradesco slid 4%, Itaú retreated more than 2%, while Itaúsa and Banco do Brasil each lost around 2%. The stock exchange operator B3 also fell by approximately 2%.

Utilities weakened as well, with Axia shedding nearly 2%. In the corporate front, Ambev dropped more than 0.5% and Vale fell about 1% ahead of their earnings reports scheduled for Thursday. Petrobras slipped more than 0.5% despite a recovery in international oil prices.