Petrobras (NYSE:PBR) +10.9% and Eletrobras (NYSE:EBR) +9.1% to lead NYSE-listed Brazilian stocks in a broad rally Monday after investors welcomed the closer than expected results of the first round of presidential voting.
Nearly complete election returns showed left-wing candidate and former president Lula da Silva held a slight lead over right-wing incumbent President Jair Bolsonaro, forcing a second round runoff after neither candidate achieved more than 50% of the vote.
Brazil's real was up as much as 3.6%, the currency's biggest one-day jump since June 2020, while the benchmark Ibovespa equity index was up 4.4% to its best level in nearly six months.
"Bolsonaro still has a chance, but this is still Lula's election to win," Edwin Gutierrez, head of emerging market sovereign debt at abrdn in London, told Bloomberg. "More importantly, Congress definitely broke far more for the right than expected. With right-wing parties being a bigger block than expected, this will definitely handcuff Lula's tax and spend agenda."