Ibovespa Slumps Amid Middle East Tensions and Rising Oil Prices

The Ibovespa index in Brazil slipped by nearly 1% to below 166,000 on Friday, extending its seven-month low. The decline was attributed to rising oil prices, which were propelled higher by tensions in the Middle East and US threats to intensify economic pressure on Iran.

Oil prices were set for strong weekly gains as the US weighed options including an extension of the naval blockade against Iran. This move contributed to inflationary pressures that negatively impacted financials and other credit-sensitive shares.

Banco do Brasil, B3, Caixa Econômica, and Itaúsa saw declines of near 1%, while utilities also traded lower due to modest growth in their industrial sectors and rising net debt. However, Cemig bucked the trend with a nearly 3% gain after reporting an 8.8% rise in EBITDA.