Brazil's Ibovespa posts worst weekly drop since 2008 after Lula re-election

Brazil's Ibovespa stock index fell 18.12% in the week ending Friday, October 30, 2026, ranking it among the four largest weekly drops this century, alongside the 2008 financial crisis, the 2020 Covid-19 pandemic, and the September 11, 2001 attacks. The decline followed President Lula's re-election, reversing a pre-election rally driven by investor bets on a victory for opponent Flávio Bolsonaro. Economists say the causes differ from past crises, which originated from global shocks, whereas this drop stems from a domestic repricing of fiscal expectations. The index had surged above 209,000 points in October before the sell-off, which included a 13.88% single-day plunge and a circuit breaker. Analysts note the drop may be an "overshooting" correction of overly optimistic expectations, with future market direction hinging on government fiscal policy signals.