Brazil’s Ibovespa fell 17.34% intraday on Oct. 26 after President Luiz Inácio Lula da Silva won reelection, capping a sharp market reaction to the runoff result.
B3 halted trading for 30 minutes when the index reached a 10% fall, in line with its circuit-breaker rules. After trading resumed, the Ibovespa later reached an intraday low of 169,516.43 points, down 17.34%, Estadão Conteúdo reported.
Brazil’s Superior Electoral Court (TSE) reported that Lula received 64,256,232 votes, or 51.79% of valid ballots. Sen. Flávio Bolsonaro received 59,826,041 votes, or 48.21%. Bolsonaro had led the Oct. 4 first round with 47.03% to Lula’s 45.16%, TSE results show.
Reuters reported that investors had favored Brazilian assets after the first round, when Bolsonaro’s lead raised expectations of tighter fiscal policy under a Bolsonaro presidency. Alejo Czerwonko, chief investment officer for emerging markets at UBS Global Wealth Management, told Reuters: “Investors want a clear and credible commitment to fiscal discipline.”
B3’s historical account lists a 22.20% one-day fall on March 21, 1990. That full-day measure is larger than Monday’s 17.34% intraday move, so the figures describe different periods.
The Central Bank of Brazil’s next Monetary Policy Committee (Copom) meeting is scheduled for Nov. 3-4.
