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The Bovespa index jumped 5.5% in a single session, its largest one-day gain since April 2020, after Jair Bolsonaro outperformed polling in Brazil's first-round presidential vote. Several companies rallied more than 10%, and Petrobras preferred shares rose 8%.
A market-friendly political outcome strengthened the real and reduced expected policy risk for Brazilian assets, which can ease the cost of dollar-denominated imports for feed buyers.
reuters.comTatiana Bautzer, Camila Moreira, Gabriel AraujoOct 3, 2022After 13 past bearish policy events, Brazilian Real (BRL per USD) moved a median -3.4% over 5 sessions (15% higher; middle half -3.4% to -1.3%), and -1.9% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
The Bovespa's 5.5% surge on the same election surprise shows a broad risk-on repricing of Brazilian assets that coincided with the sharp currency move through foreign portfolio inflows.
