Brazil’s currency rallied and the country’s main stock index also rose in a volatile session on Monday, a day after leftist Luiz Inacio Lula da Silva won the country’s presidential election.
The Brazilian real gained more than 2% against the dollar after having fallen 2% overnight. The Bovespa stock index sank 2% at the opening, rebounded to rise up to 1.3% and was up 0.6% in afternoon trade.
Da Silva, commonly known as Lula, took 50.9% of the second-round vote to President Jair Bolsonaro’s 49.1%, according to Brazil’s election authority.
Brazil is the 12th largest economy in the world and the largest in South America. China is its main business partner followed by the U.S.
The 77-year-old Lula has vowed to reduce poverty and boost economic growth, citing his record when he served two terms as president from 2003 to 2010.
Fears of more interventionist policies by Lula sank shares of state-controlled Petrobras, which fell around 8% on Monday morning.
Bolsonaro is still expected to make a public statement after a harsh campaign that polarized the nation.
As concerns of a contested election results can drive uncertainty, analysts expect no transition problems since most of Bolsonaro’s allies have already recognized Lula’s victory.
This was the country’s tightest election since its return to democracy in 1985, and the first time that a sitting president failed to win reelection.
