Lula's win hands Brazilian stocks their worst day since 2020

The final count by the electoral court, the TSE, gave Lula 51.79% of the vote and Flávio Bolsonaro 48.21%, a margin of 4,430,191 ballots. Bolsonaro had finished the 4 October first round ahead with 47%. CBS notes that this is the first time since 1985 that a candidate who placed second in the first round has won the presidency. Three minutes before polls closed, Supreme Court justice Cristiano Zanin extended voting by 2 hours at the request of both campaigns. Bolsonaro said he does not recognise the result and will ask the courts to annul the election outright. HNGN reports that UBS rates the petition's chances as slim, since his own campaign had sought the extension.

CNN Brasil puts the Ibovespa's close on 26 October at 176,608.23 points, down 13.88%, after an intraday low of 169,516.43 that marked a loss of more than 17%. That is the largest single-day percentage drop since March 2020. The real-estate index lost 28.63%, consumer names 26.14% and small caps 26.52%. CNN Brasil has the dollar closing 8.36% higher at 5.406 reais after opening at 5.60, while Boca's data show a close of 5.4029 reais and a gain of 8.21%. Citing El País, MercoPress called it the steepest fall for the real since 1999.

The shock to the yield curve ran deeper. The DI contract maturing in January 2028, the interbank rate future, rose 194 basis points to 14.8%, and the January 2031 contract gained 254 basis points to 15.185%. The Treasury cancelled its bond auctions scheduled for 27–29 October. MercoPress reports a Citi survey of 73 fund managers in which 80% expected a drop of more than 5% if Lula won. The Ibovespa had instead climbed 7.7% on 5 October, after the first round, on hopes of fiscal discipline. Investing.com data show Brazil's 5-year credit default swap, the premium to insure against default, rising from 119.26 basis points on 23 October to 137.43 on 26 October.