Brazil's benchmark stock index gained more than 8% and the real strengthened more than 4% against the U.S. dollar after Flavio Bolsonaro won 47% of the first-round vote, ahead of Luiz Inacio Lula da Silva's roughly 45%. The candidates will face each other in an October 25 runoff.
Brazilian assets rallied after Senator Flavio Bolsonaro finished first in Sunday's presidential election first round, outperforming opinion polls. The Bovespa was up more than 8%, while the real strengthened to below 5.00 per dollar from around 5.22.
Bolsonaro's allies also made gains in Congress. Analysts said a friendlier legislature could make it easier for him, if elected, to pursue tighter public spending, privatizations and tax cuts. His Liberal Party increased its Senate representation from 15 to 28 seats and is projected to win 121 seats in the 513-seat lower house, up from 98.
Shares in Magazine Luiza, B3, BTG Pactual, Localiza, Cyrela and Cosan each rose more than 20%. U.S.-traded Brazilian companies also gained, including XP, up 33%, and Nu Holdings, up 13%; StoneCo and PagBank each rose more than 20%.
