Contrary to the prediction of most of the market, on Monday, October 31, the Brazilian Stock Exchange and its currency, despite starting the day down, ended up rising after the narrow victory of the leftist Luiz Inácio Lula da Silva in the runoff presidential election.
The Brazilian real opened with a fall of close to 2% and hit a one-month low before reversing the losses and rising 0.5%, and then posting its biggest gain in almost a month after the elections:
It closed with a rise of 2.7%, the best performance among the currencies measured by Bloomberg.
The Ibovespa index also sank by 2% in early trading before recovering to gain by the end of trading 1.31%.
Traders told Reuters that this was interpreted as market support for growing hopes for a more orderly transition following Sunday’s ballot in Brazil.
In Europe and Asia, the major markets were closed, as well as in Chile, due to the holiday.
On the other hand, in the United States, Wall Street traded with declines in all its indexes due to the pessimism about the eventual new rate hike of up to 75 basis points that the Federal Reserve (Fed) would apply to curb inflation, which is at its highest levels in several decades.
The Fed will meet Tuesday and Wednesday and apply a fourth consecutive interest rate hike. At the close, the Dow Jones fell 0.39%, the S&P was down 0.75%, and the Nasdaq was down -1.03%.
In Latin America, the stock markets rose, although they were also pending the evolution of the markets in Brazil. In particular, the Argentinean Merval ended up 1.42%, the Mexican IPC advanced 1.70%, and the Colombian Colcap rose 0.97%.
Meanwhile, the copper market, Chile’s main export, continued to suffer on Monday due to the evolution of the Chinese manufacturing industry and new Covid cases.
The commodity’s spot price on the London Metal Exchange was US$341.32 per pound, 1.8% lower than Friday’s value.
With information from La Tercera