A shock in Brazil sends stocks plunging, while neoclouds take another hit
· World · CNBC
Luiz Inácio Lula da Silva has won an unprecedented fourth term as Brazil's president, sparking an overnight sell-off in the country's assets. Rival Senator Flávio Bolsonaro has refused to concede defeat, stating he would seek annulment of the outcome and calling a Supreme Court Justice's ruling to extend voting "unacceptable." The iShares MSCI Brazil ETF (EWZ) fell over 20% overnight, potentially marking its biggest one-day drop, while Brazilian Real November futures declined 10% in Asian trading. U.S.-listed shares of Brazilian companies also saw significant premarket drops, including Petrobras down over 20% and Itaú Unibanco down almost 30%. Bolsonaro was perceived as market-friendly, and Lula will need to reassure markets about debt stabilization.
Why it matters
Lula's victory has caused immediate financial market instability, impacting Brazilian stocks and the Real, which could affect international investors with holdings in Brazil. The refusal of the incumbent to concede defeat also raises concerns about political stability in the country.
Read the original report — CNBC
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