Experts: "Positive Market Reaction to Bolsonaro's Campaign"
Former Brazilian President Luiz In?cio Lula da Silva (76) is giving a speech to supporters in S?o Paulo on the 2nd (local time) after the first round of the presidential election ended. Contrary to expectations that Lula would win by a landslide, he received 48% of the vote in the first round, failing to secure a majority, and will face President Jair Bolsonaro (67) in a runoff on the 30th. [Image source=Yonhap News]
[Asia Economy Reporter Yoon Seul-gi] As voting began in the Brazilian presidential election, contrary to expectations that 'left-wing godfather' Luis In?cio Lula da Silva (76), the former president, would win by a landslide, far-right President Jair Bolsonaro (67) performed strongly, leading to a significant rise in the value of the Brazilian currency and a sharp surge in the stock market.
According to foreign media on the 3rd (local time), on the second day of the first round of the Brazilian presidential election, the value of the Brazilian currency, the real, surged about 5%, marking the largest daily increase in over four years since 2018. The Bovespa Index, the main stock index of the S?o Paulo Stock Exchange, also rose 5.54% from the previous day, closing at 116,134.
Experts analyzed that the market responded positively to President Bolsonaro's strong performance, contrary to expectations of a landslide victory for former President Lula. Even if Lula wins, there is a greater possibility of changes in the leftist policies shown in his previous pledges, raising expectations for policy continuity from the current administration.
Current President Jair Bolsonaro, who is running in the Brazilian presidential election, is giving a media interview in Brasilia on the 2nd (local time) after the first round of the election ended. The Brazilian election authorities announced that with 98.8% of the first-round votes counted, former President Luis Inacio Lula da Silva (76) received 48.1%, and President Bolsonaro (67) received 43.5%. [Image source=Yonhap News]
Conrad Saldanha, portfolio manager at U.S. asset management firm Neuberger Berman, said, "Although many still predict a victory for former President Lula, the likelihood seems to have decreased compared to before," adding, "In Lula's case, it means he might somewhat shift toward centrist policies."
Elizabeth Johnson, Brazil specialist at market analysis firm TS Lombard, also expressed expectations for a market-friendly economic policy draft, saying, "It is anticipated that former President Lula will at least reveal part of his economic team before the runoff."
Meanwhile, in the first round of the presidential election held on the 2nd, former President Lula secured 48.4% of the vote (based on completed counts), while President Bolsonaro received 43.2%. Earlier opinion polls showed Bolsonaro trailing Lula by about 10 to 15 percentage points, leading to expectations that Lula would secure victory in the first round. However, since no candidate achieved a majority, the winner will be decided in a runoff election on the 30th.
The unexpected close race is largely attributed to the influence of 'shy Bolsonaro supporters.' Daisy Shiukari, a political science professor at S?o Paulo Catholic University, told Bloomberg News, "There is a strong hidden voter base supporting Bolsonaro," adding, "This is also true in rural areas of S?o Paulo state and small towns nationwide that are not captured by opinion polls."
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