Brazil Stock Market Plunges as Lula Win Sparks Sell-Off

Brazil’s stock market plunged after Luiz Inácio Lula da Silva defeated Flávio Bolsonaro in Sunday’s presidential runoff, surprising investors who had favored Bolsonaro. The Ibovespa fell as much as 17%, triggering a 30-minute trading halt at exchange operator B3. More than $200 billion in market value was wiped out at Monday’s open, while the iShares MSCI Brazil ETF (EWZ) dropped as much as 26% before recovering some losses. The Brazilian real weakened sharply, with the US dollar rising above 5.60 reais from about 4.99 before the vote. Interest-rate futures climbed, and Brazil’s Treasury cancelled planned fixed-rate and inflation-linked bond auctions. Investors are assessing concerns about government spending, fiscal policy and debt sustainability, as a weaker currency could raise import costs and add to inflation pressure. Lula won 51.79% of the vote against Bolsonaro’s 48.21%, despite prediction markets putting Bolsonaro’s chances near 80%. Bolsonaro said he would challenge the result in court and seek to annul the election. The Brazil stock market sell-off and currency volatility put political and fiscal risks in focus. Crypto traders may monitor broader risk sentiment and emerging-market flows, but the news has no direct impact on a specific cryptocurrency.