Brazil's Ibovespa index crossed 200,000 for the first time after Bolsonaro led the first round of voting, while the dollar dropped 5% and stocks surged.
Brazil's financial markets were jolted by Monday's election result. On Monday, the Ibovespa broke past 200,000 points for the first time after right-wing leader FlĂĄvio Bolsonaro unexpectedly overtook President Lula da Silva in the opening round of the presidential election.
The index posted a gain of more than 10% on Monday, the largest single-day increase so far this year.
According to the Superior Electoral Court, Bolsonaro obtained 47.03% of votes, while Lula took 45.16%. The candidates will face each other again in a runoff scheduled for October 25.
The outcome contradicted recent opinion surveys and caused an immediate reassessment of Brazilian assets.
The EWZ fund, which is listed in the US and tracks Brazilian stocks, gained almost 13% in pre-market activity.
The real also soared. The dollar lost 5% during the session, moving in a straight decline.
JPMorgan forecast that Brazilian equities could add as much as 11% in the short run and the dollar could keep declining.
With the election not yet decided, investors are already focusing on factors beyond the vote.
âMarkets donât price election results; they price execution,â said AndrĂ© Matos, CEO of MA7 Capital.
Fiscal policy emerges as the next hurdle. Sidney Lima, from Ouro Preto Investimentos, stated that a trustworthy framework for debt and outlays might reduce Brazil's risk premium.
Gustavo Assis, of Asset, noted long-term interest rates as an initial gauge of sustained confidence.
FĂĄbio Murad, of Wiser Asset, said the dollar could turn into the quickest measure of that shift.
Share to
Disclaimer: this article comes from third-party media and is provided for reference only. It does not constitute investment advice. Crypto and other financial products carry significant price volatility risk, so please make your own decisions carefully.
A strong dollar is putting pressure on Asian emerging markets like Thailand and Indonesia, risking a vicious cycle of capital outflows and weaker currencies.
Rising bond yields can lead to higher taxes, subsidy cuts or price increases that affect consumers.
Fed hike odds drop to 18.3% after weak jobs and inflation data, with cuts at 0%. A hold is the base case.
Tokyo Financial Exchange to launch TONA futures for BoJ meeting-by-meeting rate bets, targeting improved hedging and pricing clarity.