After records, the stock market goes into free fall: why is the Ibovespa experiencing its worst sequence since 2023?

Foreigners withdraw billions from the stock market The main trigger for this sequence of losses was the withdrawal of resources by foreign investors. Until August 13, foreign investors withdrew R$15.63 billion from the Brazilian stock exchange. It is the highest monthly outflow since 2022. The previous record had been recorded just three months earlier, in May, when the negative flow totaled R$13.28 billion. As a result, 2026 is already home to the two largest monthly withdrawals of foreign capital in the historical series. ? Why does this drop the bag? When foreign investors sell large volumes of shares, the supply of these securities increases. If there are more sellers than buyers, prices fall, putting pressure on the Ibovespa. The movement contrasts with what was observed at the beginning of the year. Between January and February, foreign investors invested R$42.56 billion in the Brazilian stock market, one of the largest volumes recorded in the last decade. This flow helped Ibovespa to renew successive records and surpass, for the first time, 190 thousand points. At that time, Brazil brought together a series of factors considered attractive: high interest rates increased the profitability of local investments; many stocks were seen as cheap compared to other markets; there was greater global interest in emerging countries; and there was more money circulating in the international financial market. According to Matheus Spiess, an analyst at Empiricus, this scenario began to change when investors realized that the cuts in the Selic, the economy's basic interest rate, would be less intense than expected. "The market expected a more intense cycle of cuts in the Selic, but this expectation diminished due to the conflict in the Middle East and uncertainties regarding inflation. As a result, many investors revised their bets and reduced exposure to Brazil", he states. ? Why does this matter for the stock market? When the Selic is high, fixed income applications, such as Tesouro Direto and CDBs, start to offer more attractive returns, while credit for companies becomes more expensive. As a result, many investors leave the stock market to invest in these assets. When the Selic falls, the stock market tends to become more attractive, as companies and consumers get cheaper credit and the economy gains momentum. At the beginning of the year, part of the market believed that the Central Bank of Brazil (BC) would have room to reduce interest rates more intensely throughout 2026. After all, the Selic was at its highest level in almost two decades. With inflation taking longer to recede, the worsening of conflicts in the Middle East and concerns about public accounts, the market began to believe that interest rates would remain high for longer. “The predominant market reading is that the country is pricing in an electoral risk premium, which combines uncertainty about the continuation of the Selic cut cycle, competition for global capital with the AI ??sector in the United States and external factors, such as the conflict in the Middle East”, says Beny Fard, partner at Segundo Minuto and geopolitical and economic analyst. ? Risk premium is the additional return that investors require to invest resources in a country considered more uncertain. The greater the perception of risk, the lower the share price tends to be and the more difficult it is to attract new investments. In analysts' assessment, concern about October's presidential election also began to influence market expectations. This is because the situation of public accounts and the candidates' plan for next year directly interfere with the BC's decisions on the Selic rate.

Furthermore, the market follows electoral polls to try to anticipate the direction of economic policy from 2027 onwards. Proposals that signal greater commitment to the balance of public accounts tend to improve the country's risk perception and favor the return of foreign capital. The international scenario has also changed Photo shows a panel in Tehran on August 6, 2026, in the midst of the war between the USA and Iran. Fatemeh Bahrami/Anadolu/Reuters In addition to internal factors, the worsening of the international scenario has increased investor caution. The escalation of tensions in the Middle East has intensified the search for assets considered safer, such as the dollar, gold and US Treasury bonds. ? In the financial market, this movement is known as "flight to quality", or "flight to safety". As g1 showed, the escalation of the conflict caused gold to soar in international markets, reinforcing this movement to seek protection. "There is no single culprit. Foreign investors are leaving Brazil at a rapid pace