Brazilian ADRs plummet after Lula's surprise election win

Banco Bradesco

Mon 08:49

** US-listed shares of Brazilian companies slide premarket
** President Luiz Inacio Lula da Silva wins historic fourth term, in shock result that defied polls, precedent and global anti-incumbent sentiment
** Senator Flavio Bolsonaro, son of former president Jair Bolsonaro who had won the first round of election earlier this month, refuses to concede
** Analysts and markets bet on Bolsonaro's victory, pricing in reforms as Brazil reels under deteriorating public finances and higher interest rates
** Shares of oil giant Petrobras PETR3.SA, PBR.N tumble 20%
** Banks such as Itau Unibanco ITUB3.SA, ITUB.N down 28.5%, Banco Bradesco BBDC3.SA, BBD.N down 26.8% and Nu NU.N down 24%
** Latin America-based e-commerce firm Mercadolibre MELI.O  sheds 10.3%
** IShares MSCI Brazil ETF EWZ.P tanks 26% 
** "Lula's surprise win will dash hopes for reforms that would improve public finances and strengthen growth prospects," says William Jackson, chief EM economist at Capital Economics
** Interest-rate cuts at two meetings this year do not seem likely anymore as higher fiscal risks and weaker real can weigh - Jackson
** Benchmark Ibovespa .BVSP index, which marked its biggest one-day jump since March 2020 on October 5, up over 27% YTD

 (Reporting by Purvi Agarwal in Bengaluru)
 ((Purvi.Agarwal@thomsonreuters.com;))