Brazilian stocks jump as Bolsonaro now seen as heavy favorite to win presidency
The moves come after the first round results of Brazil's presidential election on Sunday. Bolsonaro will face incumbent Lula da Silva in a run-off on Oct. 25.
Brazilian markets surged on Monday following Senator Flávio Bolsonaro's first-round win in the presidential election, surpassing President Luiz Inácio Lula da Silva despite polls indicating otherwise. The São Paulo Stock Exchange's Bovespa index surged 8% in early trading, soaring above 208,000 points. Financial institutions such as banks were at the forefront of the rally, with Bradesco's depositary receipts climbing 15.2%, Itaú up 14.4%, Nu Holding by 12.2%, Petrobras at 10.3%, and Vale gaining 6.4%.
Meanwhile, the Brazilian real appreciated 1.4% against the US dollar, trading at 5.14 reais. Lula and Bolsonaro secured 45% and 47% of valid votes respectively, and will clash in a runoff scheduled for October 25. Analyst Pedro Galdi from AGF Investments noted that investors anticipate a shift towards fiscal tightening under Bolsonaro, who is more inclined to reduce high interest rates.
However, some caution remains, as Bolsonaro's track record in economic policymaking is questionable, and he is currently under investigation for alleged money laundering linked to Daniel Vorcaro, a former owner of Banco Master. Despite these concerns, the market appears optimistic about the prospect of change and reforms under Bolsonaro's leadership.
Written by urgent.news from MercoPress's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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