By WSJ Staff

The first-round election defeat for Brazil's leftist president Luiz Inácio Lula da Silva is sending Brazilian share prices racing.

Investors are cheered by pledges by Da Silva's right-wing opponent, Flávio Bolsonaro (the son of imprisoned former President Jair Bolsonaro) , to tame Brazil's fast-growing public debt. Brazil's gross public debt rose to 82.5% of GDP in August, according to the Brazilian central bank, compared with about 71% at the start of da Silva's term in 2023.

A Bolsonaro campaign advisor said in August he would introduce a ceiling on public debt that would trigger spending restraints.

"With Bolsonaro running on a ticket of fiscal austerity and deregulation, expect both the currency and bond market to rally," analysts at ING wrote today.

A BlackRock exchange-traded fund that tracks Brazilian equities has gained over 13% in premarket trading. Shares in Nubank, the Brazilian digital bank, jumped 12% in New York, while Brazilian investment management firm XP Inc's stock soared 16%. The Brazilian real rallied against the dollar.

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(END) Dow Jones Newswires

October 05, 2026 08:25 ET (12:25 GMT)