Lula da Silva's victory in the Brazilian presidential elections threatens to crash the local markets: investors are preparing for a sharp drop in stocks and a weakening of the real. ⨯ [Bloomberg].

Lula da Silva's victory in the Brazilian presidential elections threatens to crash the local markets: investors are preparing for a sharp drop in stocks and a weakening of the real. ⨯ [Bloomberg].

In Japan, an exchange-traded fund (ETF) tracking Brazilian shares fell 16%, and a currency derivative on the CME exchange indicated a rate of 5.60 reais to the dollar. That suggests the Brazilian currency has weakened by more than 10% since Friday's close. Brokers warn that the Ibovespa index may fall by 11% in the first hour of trading. If there is a 10% drop, the exchange will automatically stop trading for 30 minutes, and if there is another drop, additional stops are given. Previous: Lola wins a fourth term. Bloomberg Terminal.