Brazil: "Shock for the markets" - Lula's re-election causes severe market turbulence
The markets had bet on a Bolsonaro election victory. The triumph of the left-wing head of state comes as a surprise to them. Rapid price and value gains are evaporating.
Brazilian President Luiz Inácio Lula da Silva has won the presidential election, defeating challenger Flávio Bolsonaro. The outcome has triggered significant market volatility, with investors who had bet on Bolsonaro's victory rapidly selling Brazilian stocks, causing the iShares MSCI Brazil ETF to plummet 24 percent to its lowest level since January.
The market reaction reflects concerns that Lula's left-wing policies may lead to increased government spending and debt, which could exacerbate Brazil's already high inflation rate of 4.58 percent and large budget deficit of around 10 percent of GDP.
Written by urgent.news from Handelsblatt's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
