Emerging Markets-Real, Bovespa slip as tight presidential polls halt rally

Brazilian assets declined on Monday after new polls pointed to an increasingly tight presidential race ahead of next month's election, while assets across the broader region also weakened as surging oil prices curbed risk appetite.

In Brazil, the real BRL= dropped 0.8%, while the local stocks benchmark .BVSP fell 1.5% after two polls released on Monday showed Brazilian President Luiz Inacio Lula da Silva and right-wing Senator Flavio Bolsonaro statistically tied in a potential second-round runoff ahead of next month's election.

Lula regained a narrow lead over the eldest son of former President Jair Bolsonaro in a BTG Pactual/Nexus survey, while a separate Quaest poll commissioned by Globo showed the lawmaker numerically ahead for the first time.

Brazilian markets had rallied in recent sessions after polls showed Bolsonaro narrowing the gap in the presidential race. Since investors view Bolsonaro as more market-friendly, signs that Lula is regaining ground could pressure local assets.