Brazilian Stocks Plunge 17% After Lula's Re-Election, Trading Halted

Brazil's stock market plunged nearly 17 percent on Monday after President Luiz Inacio Lula da Silva won re-election, triggering a 30-minute trading halt and a 12 percent surge in the US dollar against the real. The Ibovespa index drop activated a circuit breaker for sharp market declines, following Lula's 51.8 percent victory over Flavio Bolsonaro. Stocks had hit record highs after Bolsonaro's first-round win earlier this month but fell below pre-election levels on Monday. The circuit breaker was previously triggered during the 2008 subprime crisis and 2020 Covid-19 pandemic. Lula's third term ends with record employment and controlled inflation, though rising public spending, debt, and high interest rates concern investors.