Lula's Reelection Triggers Market Selloff in Brazil

Brazil's main stock index plunged 13.9 percent, its steepest drop since March 2020, after Luiz Inácio Lula da Silva's reelection, while the real fell 8.1 percent against the dollar amid investor concerns over public finance management. Trading was suspended for 30 minutes after the index lost 10 percent, and the Treasury canceled bond auctions scheduled for October 27 and 29. The selloff reversed gains driven by expectations of a Flávio Bolsonaro victory, which had boosted stocks and currency. Investors now await Lula's finance minister pick and credible fiscal discipline plans, as public debt exceeds 82 percent of GDP. Bolsonaro's refusal to concede and push to annul results adds further uncertainty.