Brazilian ADRs rally as Bolsonaro's strong showing lifts sentiment
EWZ•U.S.-listed Brazilian shares rose premarket after Senator Flavio Bolsonaro exceeded expectations in Sunday's first-round presidential vote and took a slight lead over President Luiz Inacio Lula da Silva. Petrobras gained 10.4%, Itau Unibanco 11.2%, and the iShares MSCI Brazil ETF rose 11.6%.
1. Shares rise premarket
U.S.-listed shares of Brazilian companies rose after Senator Flavio Bolsonaro exceeded expectations in Sunday's first-round presidential vote. Bolsonaro had a slight lead over incumbent President Luiz Inacio Lula da Silva, and the two will face each other in an October 25 runoff.
2. Company and ETF moves
Petrobras gained 10.4%, Itau Unibanco rose 11.2%, Banco Bradesco advanced 10.8% and Embraer added 6.3%. MercadoLibre gained 6.8%, Nu Holdings rose 10.4%, and the iShares MSCI Brazil ETF climbed 11.6%.
3. Economist's view
Andres Abadia, chief Latin America economist at Pantheon Macroeconomics, said Bolsonaro's stronger-than-expected performance and the rightward shift in Congress should support Brazil's Ibovespa and put downward pressure on longer-term yields. Brazil's Bovespa index had gained more than 19% year to date through its last close.
