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| Brazil elections: Currency and stocks tumble after Dilma Rousseff is re-elected | Brazil elections: Currency and stocks tumble after Dilma Rousseff is re-elected |
| (about 3 hours later) | |
| Brazilian stocks plunged on Monday as investors reacted to Dilma Rousseff's victory in the country's presidential election on Sunday. | Brazilian stocks plunged on Monday as investors reacted to Dilma Rousseff's victory in the country's presidential election on Sunday. |
| Brazil's benchmark Bovespa stock index fell as much as five per cent with state-owned companies bearing the brunt of the losses. | Brazil's benchmark Bovespa stock index fell as much as five per cent with state-owned companies bearing the brunt of the losses. |
| Oil giant Petrobras fell as much as 13 per cent, wiping more than $20 billion from the company's value, while the state-run utility Eletrobras tumbled 11 per cent. | Oil giant Petrobras fell as much as 13 per cent, wiping more than $20 billion from the company's value, while the state-run utility Eletrobras tumbled 11 per cent. |
| Banco do Brasil and Itau, the country's second largest lender by assets, fell 12 per cent and 6 per cent respectively as investors dumped Brazilian assets. Meanwhile, the Brazilian real plummeted to a new nine-and-a-half year low. | Banco do Brasil and Itau, the country's second largest lender by assets, fell 12 per cent and 6 per cent respectively as investors dumped Brazilian assets. Meanwhile, the Brazilian real plummeted to a new nine-and-a-half year low. |
| Rousseff, a former Marxist guerrilla fighter, narrowly beat centre-right candidate Aecio Neves with 51.4 per cent of the vote in the closest election in decades, leaving Brazil divided along social and geographic lines. | Rousseff, a former Marxist guerrilla fighter, narrowly beat centre-right candidate Aecio Neves with 51.4 per cent of the vote in the closest election in decades, leaving Brazil divided along social and geographic lines. |
| Neves, a senator and former governor of the state of Minas Gerais, had promised to speed up economic reforms, make the central bank more independent and encourage foreign investment against a backdrop of rising inflation, falling commodity prices and a slowdown in the economy. | Neves, a senator and former governor of the state of Minas Gerais, had promised to speed up economic reforms, make the central bank more independent and encourage foreign investment against a backdrop of rising inflation, falling commodity prices and a slowdown in the economy. |
| "We anticipate that the re-election campaign will act as a wake-up call for Rousseff, helping to recognise the inadequacies of her past policies," said Kunal Ghosh, manager of the Allianz BRIC Stars Fund, which overseas £260 million. | |
| "We will continue to maintain an underweight position in state-owned enterprises and banks in Brazil as policy changes will take time," he added. | "We will continue to maintain an underweight position in state-owned enterprises and banks in Brazil as policy changes will take time," he added. |
| On Sunday, Rousseff struck a conciliatory tone and vowed to tame inflation, which is running above six per cent, and "make improvements" when it comes to Brazil's public finances. | On Sunday, Rousseff struck a conciliatory tone and vowed to tame inflation, which is running above six per cent, and "make improvements" when it comes to Brazil's public finances. |
| Rousseff had previously announced Guido Mantega, the country's finance minister, would be replaced, presumably by a more pro-business minister, if she won a second term. | Rousseff had previously announced Guido Mantega, the country's finance minister, would be replaced, presumably by a more pro-business minister, if she won a second term. |