The Brazilian stock market index Ibovespa reached a historic milestone by surpassing 200,000 points on Monday. This growth followed the first round of the presidential election, where candidate Flavio Bolsonaro secured 47.03% of the vote, outpacing President Lula da Silva who received 45.16%.
The benchmark index recorded a daily increase of over 10%, marking its largest single-day gain for the year. Simultaneously, the US-listed EWZ fund, which tracks Brazilian equities, rose by nearly 13% during pre-market trading. The national currency strengthened as the dollar fell by 5%.
JPMorgan analysts suggest that Brazilian stocks could see further growth of up to 11% in the short term, with the potential for the dollar to continue its decline. The final outcome of the election will be determined in a runoff scheduled for October 25.
Market participants are now focusing on future fiscal policies, including debt management and government spending. Analysts from MA7 Capital, Ouro Preto Investimentos, Wiser Asset, and Asset highlight that long-term interest rates and currency fluctuations will serve as key indicators of investor confidence.
