Brazilian Markets Brace for Selloff After Lula's Presidential Win

invezz.com (Dutch) —

Brazilian markets are bracing for a sharp selloff after left-wing candidate Luiz Inácio Lula da Silva won Sunday's presidential runoff, with the iShares MSCI Brazil ETF (EWZ) falling 27% in premarket trading. Lula secured 51.8% of the vote, defeating conservative challenger Flávio Bolsonaro and reversing investor expectations of fiscal austerity and deregulation. Bolsonaro refused to accept the result, citing irregularities and raising concerns about post-election unrest. Analysts predict double-digit losses for the Bovespa index and a 5-7% gap higher in USD/BRL, as Brazil's high debt and interest costs remain a key vulnerability without a credible fiscal plan from Lula's administration.


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