Brazilian Markets Plunge After Lula Reelection Victory

Brazil's stock market plunged Monday after President Luiz Inácio Lula da Silva won re-election, with the Ibovespa index falling as much as 17.34% and triggering a circuit breaker that halted trading for 30 minutes. The selloff reversed gains from October 5, when the index jumped 7.7% on expectations that challenger Flávio Bolsonaro would win and implement more liberal economic policies. The dollar rose 8.78% to R$ 5.43, while long-term interest rates exceeded 15% annually. Analysts cited fiscal concerns and governance challenges as key risks ahead, though they noted that the approval of a fiscal framework in 2023 helped markets recover after the 2022 election. The Treasury canceled bond auctions scheduled for this week.