Brazilian Stocks Rise After Bolsonaro Seen As Strong Favorite To Win Presidency
Brazilians will face off between Flávio Bolsonaro and Luiz Inácio Lula da Silva in a presidential run-off on October 25, after neither candidate secured an outright majority in the first round. The results have shifted investor sentiment, with prediction markets now giving Bolsonaro over an 80% chance of winning compared to around 60% before the election. This is due to his stronger-than-expected performance in the first round, where he outperformed Lula by nearly two percentage points. Brazilian stocks surged following this news as investors perceive a potential Bolsonaro victory more favorable for markets than another term under President Lula. The iShares MSCI Brazil ETF (EWZ) rose over 12%, while major banks like Itau Unibanco and Banco Bradesco saw significant gains. Bolsonaro is seen as promoting fiscal discipline, which contrasts with the current administration's deficit-to-GDP ratio of nearly 10% in June. Lula’s campaign has attempted to link Bolsonaro to his father’s controversial actions but faces a candidate who now appears more likely than ever to win.
Tickers: $EWZ
Topics: Brazil Flávio Bolsonaro Investor Sentiment Luiz Inácio Lula da Silva Presidential Election