In July 2024, foreign investors made a comeback in the Brazilian stock market, becoming net buyers for the first time this year. By the end of July, their investments in Brazilian equities totaled R$3.6 billion ($623.4 million), although the year-to-date figure remains negative at R$36.5 billion ($6.321 billion).
July’s Market Performance
The B3 had a standout month in July, with the Ibovespa index rising by 3.02%, its best performance of the year. Despite this, the index still shows a negative movement of 4.9% for the year.
According to BTG Pactual, the R$3.6 billion ($623.4 million) inflow is a positive sign, although it falls short of the R$20 billion ($3.463 billion) monthly inflows from late last year.
Factors Driving the Market
Several factors, including the decline in U.S. Treasury yields and anticipated interest rate cuts, contributed to the positive performance in July. Market confidence was boosted by expectations of rate cuts by the Federal Reserve. However, Brazil still faces monetary and fiscal challenges, with the government’s budget cuts helping but more needed to restore market confidence.
Despite these challenges, the Brazilian stock market is likely to continue benefiting from favorable conditions in the U.S.
Some Foreign Capital Returns to São Paulo’s B3 After Months of Outflows
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