Brazil's stock exchange halts trading 30 minutes after Lula win
The Ibovespa fell 10% at the open, tripping the B3's circuit breaker. The dollar went from 5.04 reais on Friday to more than 5.40 on Monday.
Brazil's main stock exchange, the B3 in São Paulo, halted trading for 30 minutes in stocks, stock options and private fixed income on Monday, the first trading day after President Luiz Inácio Lula da Silva's reelection.
The pause is a circuit breaker, an automatic brake that kicks in when the Ibovespa, the exchange's benchmark index, drops 10% from the previous close. Trading resumed with an auction from 10:30 to 10:35 a.m. in Brasília (7:30 to 7:35 a.m. in Mexico City).
After the reopening, the index fell as much as 17% during the session.
The real slid too. The dollar opened near 5.42 reais and touched 5.60 during the morning, compared with the 5.04 reais of Friday's PTAX, the reference exchange rate calculated by Brazil's central bank. Those are intraday figures, not a close.
The drop comes a day after Lula won the runoff, with the final polls favoring his rival, Flávio Bolsonaro. The B3 had not hit the brake like this since March 2020, at the height of the pandemic.
Brazil is Latin America's largest economy, and its stock market and currency work as a gauge of investor appetite for emerging markets, where the Mexican peso also trades.
Brazil's central bank will publish Monday's PTAX, the first official exchange-rate reference since the election, early in the afternoon in Brasília.
