Brazil's stock market suffered a historic collapse today following the surprise election of President Luiz Inacio Lula de Silves, with the Ibovespa index plunging 17.34%, its sharpest drop in decades. The sale reportedly wiped out more than US$890 billion in market value. Brazil's B3 exchange caused a 30-minute emergency trading halt, its first since March 2020, while the Brazilian real plunged about 12% against the US dollar. The crash followed investor expectations of a victory for Flavio Bolsonaro, whose proposed fiscal reforms were seen as more market-friendly. Concerns about continued government spending, increasing debt and fiscal uncertainty fueled the sell-off, prompting Brazil's treasury to cancel planned government bond auctions.

Brazil's stock market suffered a historic collapse today following the surprise election of President Luiz Inacio Lula de Silves, with the Ibovespa index plunging 17.34%, its sharpest drop in decades. The sale reportedly wiped out more than US$890 billion in market value. Brazil's B3 exchange caused a 30-minute emergency trading halt, its first since March 2020, while the Brazilian real plunged about 12% against the US dollar. The crash followed investor expectations of a victory for Flavio Bolsonaro, whose proposed fiscal reforms were seen as more market-friendly. Concerns about continued government spending, increasing debt and fiscal uncertainty fueled the sell-off, prompting Brazil's treasury to cancel planned government bond auctions.