The markets are beginning to consider a Bolsonaro win in the election's first round in their projections - and price assets accordingly. Trading desks showed their glee through Tuesday's closing numbers.
The São Paulo Stock Market skyrocketed, with a high of 3.80% - the highest since November 2016. The floor registered 81,612 points, the highest since May 22, when the truckers' strike began.The spike was triggered by state companies' stock. Banco do Brasil's shares went up more than 11.41% and boosted other banking stock. Petrobras' preferred stock shares went up 8.66% while the common stock gained 6,74%.
The same happened with currency exchange rates. The dollar went down 2.09%, staying below R$ 4 -- it closed at R$ 3.9350, the lowest rate since August 17. At a certain point of the day, it reached R$ 3.9060.Only three emerging currencies gained against the dollar on Tuesday: the Argentinian peso, Brazilian real and the yen.
Brazil's performance was completely detached from the rest of the world markets. It reflected the reaction of the latest Ibope poll, released on Monday (1st) after the market closed.The survey showed an increased of frontrunner Jair Bolsonaro (PSL) against the second place Fernando Haddad. The Ibope poll showed Bolsonaro with 31% of voting intentions, while Haddad kept at 21%. The margin of error is two percentage points.
Translated by NATASHA MADOV