FX.co ★ Brazil’s stocks dive on Rouseff re-election

Monday, Brazil’s equity markets tumbled following the depreciation of the national currency. Analysts link such stock dynamic by the results of the second round of the presidential election. Incumbent president Dilma Rousseff won a second term by a narrow margin.
Brazil's benchmark equity index, the Bovespa, slumped 4.5%. At the same time, iShares MSCI Brasil Capped ETF recorded a market capitalization drop of 6.1%. Besides, the stock of state-owned oil giant Petroleo Brasiliero plunged a whopping 13.5%.
Meanwhile, the Brazilian real sank as low as 2.556 against the U.S. dollar and recently traded at 2.524 heading for its weakest end-of-day level in nearly a decade. Thus, the USD/BRL pair plummeted to a nine-year low.
Dilma Rouseff was re-elected mainly due to the support of the poor population who welcome social aid programs launched by her party. However, analysts note that the business community hoped a new president would take office.