Brazilian stocks and the real slump after Lula wins re-election
The Bovespa fell 10%, triggering a 30-minute trading halt, after Luiz Inácio Lula da Silva beat Flávio Bolsonaro in Sunday’s run-off. Reports of the real’s fall range from 8% to 12%.
Source published · In the Daily Brief of 27 October 2026
Lula’s victory surprised markets because Flávio Bolsonaro, son of the former president, had led the first round. Investors had positioned for a Bolsonaro win and tighter fiscal policy: stocks closed on Friday almost 7% above their level before the first round. On Monday the Bovespa index fell 10% from its previous close, triggering the circuit breaker, and index futures dropped nearly 15%.
Al Jazeera, citing Reuters, reported the real down 12% against the dollar in spot trading, while MercoPress put the fall at more than 8%. Interest rate futures rose as traders priced more spending and higher rates. Public debt exceeds 82% of GDP, and Lula’s team targets a budget surplus of about 1.3% of GDP by 2030. Bolsonaro has not conceded.