Stocks and FX advance with Brazil election in spotlight
SPY•Emerging-market equities and currencies edged higher, with Brazil in focus after Flavio Bolsonaro led the first round of presidential elections. U.S.-listed shares of Petrobras rose 9.4% in premarket trading, Itau Unibanco gained 8.4% and Embraer climbed 5.3%.
1. Brazil election lifts assets
Emerging-market equities and currencies edged higher as investors focused on Brazil, where Senator Flavio Bolsonaro took the lead in the first round of presidential elections. Analysts expected his stronger-than-expected performance to support Brazilian stocks and the currency; a German-listed Brazil ETF rose 16%, while U.S.-listed Petrobras shares gained 9.4% in premarket trading. Itau Unibanco and Embraer rose 8.4% and 5.3%, respectively.
2. Regional market developments
MSCI’s emerging-market equities index rose 1.2% to a one-week high, while its emerging-market currencies index added 0.2%. In Turkey, the benchmark index rose 2% after regulators extended a lower minimum equity maintenance requirement for margin trading through October 30. The IMF reached a staff-level agreement with Sri Lanka for about $345 million in financing, while India said trade talks with the United States had reached a plateau.
