June has the 2nd month of foreigners leaving the Stock Exchange; year remains positive

B3 recorded a net outflow of foreign capital on the Stock Exchange for the second consecutive month in June. Foreigners withdrew R$7.785 billion from the Stock Exchange, which reduced the positive balance for 2026 to R$33.847 billion, half the record of R$69.070 billion registered on April 14. Still, the amount is 26% higher than in the first half of last year.

The movement is due to both external and internal factors: abroad, negotiations surrounding the end of the war in Iran have rekindled interest in Asian markets, along with the search for assets related to technology and artificial intelligence (AI), much stronger in countries like South Korea and Taiwan.

"The drop by half has a lot to do with the rotation of flows that went from value stocks to growth", assesses BTG Pactual's chief strategist, João Scandiuzzi. "Brazilian shares are mainly about value: they are consolidated, dividend-paying, profit-generating, solid companies, but they don't have exactly the same appeal as, for example, the technology sector in terms of growth and market potential", he says.

Precisely because it has a large weight in the commodities area, the Ibovespa fell 1.1% in June, also affected by the 20% drop in oil in the month, after the ceasefire signed between the United States and Iran increased the supply of the commodity with the release of Iranian exports. The move resulted in the biggest quarterly loss in oil prices since 2020.

On the local horizon, concerns about interest rates return: contrary to the optimism of the first months of the year, when significant cuts in the Selic rate were expected, in the latest minutes the Monetary Policy Committee (Copom) brought a tougher view and signaled the chance of no interest rate cuts.

"At the beginning of the year, we had a very clear scenario, which was a weaker dollar in the world", points out the head of Equities at Bradesco Asset Management, Rodrigo Geraldes. "This comes from a series of reasons, but in particular the drop in interest rates in the American market and a constitutional concern. We had Brazil with the prospect of cutting interest rates, and the country was one of the best alternatives, it was the emerging market that had the most interest cuts in 2026."

Discounted market

Despite the reduction in pace, the foreign balance until June 2026 is still 26% higher than in the same period last year. For the second half of the year, the market still projects an Ibovespa with gains and some return of foreign capital, but hardly at the same level as the R$69 billion recorded in April.

In a report, Citi stated that Brazil appears increasingly cheaper in relation to developed markets: the bank highlights that the multiple of 8.4 times the projected price-to-profit of the Brazilian market represents one of the biggest discounts for developed countries in a long time and assesses that, with the de-escalation of the conflict with Iran, the normalization of oil and the space for the Central Bank to cut interest rates, the risk-return relationship begins to become more asymmetrical upwards, that is, with a tendency to high.

On the other hand, the market is still divided regarding the interest rate route. "The negotiations to end the war [in Iran] bring some relief, but not in absolute terms that change from water to wine, neither here nor abroad", points out Scandiuzzi, from BTG. "Here we have a worse scenario, there's El Niño, inflation, food, industrial surprises... A good question is what the conditions will be and when they will be more ripe for a resumption of this cycle of easing [of interest rates]. This, in our view, will probably happen next year."

There is a new factor that appears on the horizon and generates uncertainty: the Brazilian elections in October. "No one will want to show a willingness to adjust and we see a series of stimuli for the economy that have also sustained activity even at a high interest rate level", says Geraldes, from Bradesco Asset. "We don't believe it will reach the point where the flow of the year will be zero. But we also don't see a big change that would make it come close to what it was at the beginning of the year."

(With the collaboration of Camila Vech, Vinícius Novais, Darlan de Azevedo)

Source: CNN