Brazilian markets plunge after Lula's surprise win; ETF drops 20%, real under pressure
Brazilian financial markets reacted sharply to Luiz Inácio Lula da Silva's unexpected runoff election victory, with the EWZ ETF plunging nearly 20% and the real under heavy pressure. The iShares MSCI Brazil ETF, tracking major Brazilian companies, fell about 20% in pre-market trading, with heavy losses in key stocks like Petrobras and Itaú, each down nearly 13%. Futures on the Brazilian real also depreciated by 10%. Analysts noted the currency's weakness could impact Argentina, a key trading partner, given the bilateral exchange rate is as appreciated as in November 2023. Experts said Monday's market opening will be crucial to gauge the magnitude of the selloff and whether it spreads regionally or moderates.