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latin america PRESIDENTIAL ELECTION

Brazil stock market soars after Bolsonaro's first-round win

Within 20 minutes of the opening, Brazil's Ibovespa index leapt over six percent. It later stabilised at around a five percent gain.

Monday 8 October, 2018
A woman reads the front page of a newspaper referring to the results of the first round national election at a newsstand in Brasilia.
A woman reads the front page of a newspaper referring to the results of the first round national election at a newsstand in Brasilia. Foto:EVARISTO SA / AFP

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Brazil's stock market soared this morning after far-right firebrand Jair Bolsonaro handily won the first round of the presidential election with a promise of sweeping economic reforms.

While the results energised investors, the election has deeply polarised Brazil, leaving voters with a stark choice in an October 28 run-off that will now take place between Bolsonaro, a former Army captain, and leftist Fernando Haddad of the Workers' Party (PT).

Within 20 minutes of the opening, Brazil's Ibovespa index leapt over six percent. It later stabilised at around a five percent gain.

An ultra-conservative former paratrooper, Bolsonaro easily beat out a dozen other presidential candidates but did not garner enough votes to avoid the showdown with Haddad, the former mayor of São Paulo.

Better-off Brazilians have rallied to Bolsonaro's pledge to crush crime in a country where there are more than 62,000 murders each year, nearly as many rapes, and frequent muggings and robberies. 

Many voters also like his promises to tackle corruption and to cut climbing public debt through privatisations, as well as the devout Catholic's family-first stance.

Divided electorate

But poorer Brazilians, who benefitted the most from the heyday of former president Luiz Inácio Lula da Silva's time in office from 2003 to 2010, want a return to good times and hope Haddad – who replaced Lula as the PT's candidate after he was disqualified – can deliver.

The result is a heavily divided electorate. Whoever ultimately wins the presidency in the world's eighth largest economy will grapple with a large bloc of ideological hostility. Brazil's outgoing President Michel Temer, who has record unpopularity, did not stand in the election

Bolsonaro won 46 percent of the vote to Haddad's 29 percent, according to official results, which slightly exceeded pollster's predictions. Bolsonaro charged that "polling problems" had cheated him of outright victory in the first round, which required him to pass the 50 percent threshold.

Some of his supporters protested outside the national electoral tribunal in the capital Brasilia, chanting "Fraud!"

That anger reflected the uncertain outlook for the second round. 

Surveys suggest Bolsonaro has the edge, but that Haddad will close the gap after picking up substantial support from the defeated candidates.

Eurasia Group, a political analysis firm, said in a briefing note that its assessment was that "Bolsonaro is favoured to win in a run-off and, as such, we are increasing his odds of winning from 60 percent to 75 percent."

'Golden opportunity'

"We expected to win in the first round," 77-year-old retiree Lourdes Azevedo, a Bolsonaro voter, said bitterly in Rio de Janeiro after Sunday's election. "Now things are more difficult: the second round is a risk."

Haddad, addressing his supporters, called the looming run-off "a golden opportunity," and challenged Bolsonaro to a debate.

Despite his complaints, Bolsonaro did not formally contest Sunday's result, saying his voters "remain mobilised" for the second round.

But he faces fierce resistance going forward from a big part of Brazil's 147-million-strong electorate put off by his record of denigrating comments against women, gays and the poor. 

His unabashed nostalgia for the brutal military dictatorship that ruled Brazil between 1964 and 1985 has also sent a chill through many voters.

Haddad, though, has his own burden to bear. As the Workers' Party candidate, he faces the palpable disappointment and anger of voters who blame the party for Brazil's worst-ever recession, and for a long string of graft scandals.

Bolsonaro favoured

Sunday's general election – in which new federal and state legislatures were also chosen – exposed the deep divisions generated by both candidates. Established politicians in many states did badly against upstarts.

Some voters – particularly women – carried "Not Him" placards to polling stations in opposition to Bolsonaro.

But his supporters, like 53-year-old lawyer Roseli Milhomem in Brasilia, said they backed the veteran lawmaker because "Brazil wants change."

"We've had enough of corruption. Our country is wealthy – it can't fall into the wrong hands," she said.

Political analyst Fernando Meireles of Minas Gerais Federal University said momentum appeared to favour Bolsonaro. 

"The probability of Bolsonaro coming out victorious seems pretty big right now," Meireles told AFP.  "It looks difficult for Haddad to win in the second round, but not impossible."

Despite sitting in Congress for nearly three decades, Bolsonaro casts himself as a political outsider in the mould of US President Donald Trump or the Philippines' Rodrigo Duterte: tough-talking, brash, and promising a root-and-branch overhaul to an electorate weary of traditional parties spouting empty promises.

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