By Radarr Africa Business Desk
October 26 (Radarr Africa) – Brazilian assets came under heavy pressure in overseas trading after President Luiz Inacio Lula da Silva won a fourth term in Sunday’s runoff, a result his challenger Flavio Bolsonaro has refused to accept, according to Trending Topics and Reuters.
Trending Topics, citing the Superior Electoral Court, reported that Lula won 51.79 per cent of the vote against 48.21 per cent for Bolsonaro. That equals about 64.3 million votes to about 59.8 million, a margin of roughly 4.4 million votes.
The result surprised investors. Trending Topics said markets had expected a Bolsonaro win, with the Ibovespa stock index up nearly 7 per cent and the real up more than 4 per cent against the dollar since the first round in early October. Bolsonaro had led the first round 47 per cent to 45 per cent, it said.
Real futures fell about 9 per cent, and an Ibovespa exchange-traded fund listed in Tokyo lost almost 13 per cent, according to Bloomberg Linea as cited by Trending Topics. Reuters, in a report carried by Business Recorder, said a Brazil ETF traded in Tokyo fell 15 per cent. Bloomberg Economics had projected that the real could fall about 11 per cent after a Lula victory, Trending Topics reported.
The full scale of the move will only be clear when regular trading resumes in Brazil on Monday, Trending Topics said.
Bolsonaro, a senator and the son of former president Jair Bolsonaro, said on election night that it was “impossible to recognize the result”, according to InfoMoney as cited by Trending Topics. His campaign plans to ask the electoral court to annul the runoff, Reuters said.
The dispute centres on a decision by Supreme Court justice Cristiano Zanin, made three minutes before polls were due to close, to extend voting by two hours. Lula’s camp had asked for the extension because of bus problems in Sao Paulo and Salvador, while Bolsonaro’s camp cited heavy rain in the south, Trending Topics reported. Bolsonaro argues the extension came too late in some regions where ballot boxes had already closed, and he objects that a Supreme Court justice, not the electoral court, issued the ruling.
Trending Topics said Bolsonaro has not yet presented evidence for his claim that Liberal Party monitors were removed from the vote-counting room.
The outcome carries political weight beyond Brazil. Trending Topics noted that no candidate has won the presidency since 1985 after finishing second in the first round. Lula, who is about to turn 81, has criticised US President Donald Trump, whose administration has imposed steep tariffs on Brazilian exports. Bolsonaro had promised closer ties with the White House and better trade deals, including on rare earths. Trump did not endorse a candidate, the report said.
Lula will need centrist alliances to pass reforms because the Liberal Party remains the largest force in both houses of Congress, Trending Topics reported. His term begins in early January.
Prediction markets had favoured Bolsonaro before the vote. About $185 million was wagered on Polymarket, where traders gave Bolsonaro a 77 per cent chance a week before the vote, and final polls had him about two points ahead, within the margin of error, the report said.
The Brazilian vote lands in a week of central bank meetings and big technology earnings. Reuters reported that markets were also watching decisions from the US Federal Reserve, the European Central Bank and the Bank of Japan, with oil-driven inflation a concern.
