Brazil Stocks Crater As Bolsonaro Seeks To Annul Runoff After Socialist Lula's Shock Victory
Brazilian Senator Flávio Bolsonaro said overnight that he would seek to annul the presidential runoff, challenging a last-minute, two-hour voting extension granted at the request of socialist President Luiz Inácio Lula da Silva's campaign. The order came from Supreme Court Justice Cristiano Zanin, Lula's former personal attorney, whom the president appointed to the high court. Lula later won the runoff after Bolsonaro finished first in the first round earlier this month, setting the stage for a legal challenge to the court's questionable intervention.
According to the electoral court, Lula was re-elected for a record fourth term on Sunday, taking 51.76% of the vote to Bolsonaro's 48.24% in a surprise outcome.
Via Bloomberg:
Bolsonaro said, "It is impossible to recognize the election outcome given the circumstances in which all of this took place," adding, "We will pursue legal action and seek to have the election annulled."
Trump:
Greta received her talking points:
The questionable voting-extension ruling came minutes after polling stations nationwide were scheduled to close at 5 p.m. local time. Zanin later clarified that it applied only to polling stations that remained open.
UBS analyst Justin Wensek told clients, "Flavio's annulment request is unlikely to hold water given his campaign also asked for additional time in specific states that were impacted by adverse weather."
The focus now shifts to Brazilian markets, where the "Bolsonaro trade" has reversed and shares of companies across the banking, steel and metals, and oil and gas sectors have plunged:
BANKS, FINANCIAL FIRMS
US-listed shares in lenders fall: Banco Bradesco -27%, Itau Unibanco Holding -28%, NU Holdings -22%, Inter & Co. -32%, Banco Santander (Brasil) -11%
Among other financial firms: PagSeguro Digital -28%, StoneCo -31%, PicS -27%
STEEL, METAL & MINING
Among movers: Companhia Siderurgica Nacional -13%, Vale -7.7%, Gerdau S.A. -14% AERO,
OIL & GAS AND OTHER SECTORS
Among other movers: XP Inc. -39%, Ambev -19%, Embraer -2.6%, MercadoLibre -2.6%, Telefonica Brasil -16%, Companhia Energetica de Minas Gerais -15%, Companhia Paranaense de Energia -17%, Petroleo Brasileiro -19%, Ultrapar Participacoes -18%, Cia de Saneamento Basico do Estado de Sao Paulo (SABESP) -22%, TIM S.A. -17%
iShares MSCI Brazil ETF (EWZ) cratered 27% in premarket trading on the surprise Lula win.
UBS analyst Wensek added more color on the significant repricing of Brazilian assets as the market readjusts to four more years of socialist Lula:
Beyond Bolsonaro's possible court battle to challenge the results, Brazil now faces a financial reckoning as public debt has climbed to 83% of GDP from 71.7% when Lula and the socialists took office in January 2023, leaving traders to digest the continued fiscal deterioration.
ING analysts see a 5%-7% slide in real terms and double-digit stock losses today. The repricing is already underway offshore: Brazil's dollar bonds were among the worst performers in emerging markets, with yields on notes due in 2037 jumping 19 basis points to 6.44%.
What Goldman analysts expect from here:
Brown Brothers Harriman's Elias Haddad sees a buying opportunity emerging from the selloff.
Tyler Durden Mon, 10/26/2026 - 07:30
Continue reading...
[ H/T ZeroHedge ]
Brazilian Senator Flávio Bolsonaro said overnight that he would seek to annul the presidential runoff, challenging a last-minute, two-hour voting extension granted at the request of socialist President Luiz Inácio Lula da Silva's campaign. The order came from Supreme Court Justice Cristiano Zanin, Lula's former personal attorney, whom the president appointed to the high court. Lula later won the runoff after Bolsonaro finished first in the first round earlier this month, setting the stage for a legal challenge to the court's questionable intervention.
According to the electoral court, Lula was re-elected for a record fourth term on Sunday, taking 51.76% of the vote to Bolsonaro's 48.24% in a surprise outcome.
Via Bloomberg:
Bolsonaro said, "It is impossible to recognize the election outcome given the circumstances in which all of this took place," adding, "We will pursue legal action and seek to have the election annulled."
Trump:
Greta received her talking points:
Greta has a take on the Brazilian election: Lula = good for the planet Anyone else = literal apocalypse LMAO
Writer: Samuel https://t.co/5jNhSlYxSM
— Mario Nawfal (@MarioNawfal) October 25, 2026
The questionable voting-extension ruling came minutes after polling stations nationwide were scheduled to close at 5 p.m. local time. Zanin later clarified that it applied only to polling stations that remained open.
UBS analyst Justin Wensek told clients, "Flavio's annulment request is unlikely to hold water given his campaign also asked for additional time in specific states that were impacted by adverse weather."
The focus now shifts to Brazilian markets, where the "Bolsonaro trade" has reversed and shares of companies across the banking, steel and metals, and oil and gas sectors have plunged:
BANKS, FINANCIAL FIRMS
US-listed shares in lenders fall: Banco Bradesco -27%, Itau Unibanco Holding -28%, NU Holdings -22%, Inter & Co. -32%, Banco Santander (Brasil) -11%
Among other financial firms: PagSeguro Digital -28%, StoneCo -31%, PicS -27%
STEEL, METAL & MINING
Among movers: Companhia Siderurgica Nacional -13%, Vale -7.7%, Gerdau S.A. -14% AERO,
OIL & GAS AND OTHER SECTORS
Among other movers: XP Inc. -39%, Ambev -19%, Embraer -2.6%, MercadoLibre -2.6%, Telefonica Brasil -16%, Companhia Energetica de Minas Gerais -15%, Companhia Paranaense de Energia -17%, Petroleo Brasileiro -19%, Ultrapar Participacoes -18%, Cia de Saneamento Basico do Estado de Sao Paulo (SABESP) -22%, TIM S.A. -17%
iShares MSCI Brazil ETF (EWZ) cratered 27% in premarket trading on the surprise Lula win.
UBS analyst Wensek added more color on the significant repricing of Brazilian assets as the market readjusts to four more years of socialist Lula:
Beyond Bolsonaro's possible court battle to challenge the results, Brazil now faces a financial reckoning as public debt has climbed to 83% of GDP from 71.7% when Lula and the socialists took office in January 2023, leaving traders to digest the continued fiscal deterioration.
ING analysts see a 5%-7% slide in real terms and double-digit stock losses today. The repricing is already underway offshore: Brazil's dollar bonds were among the worst performers in emerging markets, with yields on notes due in 2037 jumping 19 basis points to 6.44%.
What Goldman analysts expect from here:
Brown Brothers Harriman's Elias Haddad sees a buying opportunity emerging from the selloff.
Tyler Durden Mon, 10/26/2026 - 07:30
Continue reading...
[ H/T ZeroHedge ]
