Brazilian Stocks Plunge as Lula Wins Surprise Re-election; EWZ Falls 21%, Bradesco Down 30%

Brazilian equities tumbled Monday after President Luiz Inácio Lula da Silva won Sunday's runoff against Flavio Bolsonaro, a result investors saw as less business-friendly. The iShares MSCI Brazil ETF (EWZ) fell 21% in afternoon trading, and trading in São Paulo was briefly halted as the Bovespa index plunged—the first such halt since 2020. Financial stocks led the selloff: Bradesco (BBD) dropped 30%, while Itau Unibanco (ITUB) and Nu Holdings (NU) fell 21% and 18%, respectively. Petrobras (PBR) slid 15% and Vale (VALE) lost nearly 4%. The Bovespa, up 27% year-to-date through Friday's close and the world's top-performing major index, was recently down 14%. Lula, the Workers' Party stalwart now in his third term, took nearly 52% of the vote, a margin of more than 4 million over Bolsonaro, son of former president Jair Bolsonaro. Bolsonaro has called for the results to be annulled, citing a Supreme Court decision to extend voting by two hours.