Investing.com -- Latin American managers are beginning to regain optimism about the Brazilian stock market, according to a Bank of America (BofA) Managers Survey released on Tuesday. Of the 32 managers who responded, with US$74 billion in assets under management, 43% expect Brazil’s main stock index to close 2025 with a score above 140,000 points, compared to 18% in the April survey, when the prevailing view was for the Ibovespa to be between 130,000 and 140,000 points by the end of the year.

The Ibovespa renewed its intraday record today, trading up 1.8% at 139,035 points at 3:20 P.M. ET. If the index closes at this level, it will break the previous closing record set on August 28 last year.

The managers’ optimism is reinforced by the proximity of the end of the current Selic rate hike cycle , the greater perception of an upward revision of Brazilian companies’ profits in 2025 and the easing of the trade war between the US and China. Although most managers see few significant impacts from the Sino-US dispute on the pricing of Brazilian assets, "US tariffs" and "China and commodity prices" are seen as the biggest risks for Latin American markets.

22% of respondents believe that companies will see an upward revision in their profits, the highest level since November 2024, although most still expect forecasts to remain stable. The projection for the terminal Selic rate is between 14.75% and 15% for most managers, with the basic interest rate expected to be between 14.5% and 15% at the end of 2025. Bank of America points out in the report that its analysts predict that the Copom will end its interest rate hike at 14.75%. However, managers are betting that there will be a portfolio rotation to stocks when the Selic reaches 9% per year.

Still, 27% of managers are more risk-hungry, with financials and utilities being rated as Overweight, versus commodities and consumer discretionary, which were rated by most managers as Underweight. Most managers expect high-quality stocks to outperform over the next six months.

Finally, the expectation of the managers interviewed by BofA is that the dollar will close between R$5.70 and R$6.00 at the end of 2025. Most of the projections for Brazil’s GDP at the end of the year are between 1% and 2% growth, although the number of respondents who see the GDP closing between 2% and 3% this year is growing.