The Ibovespa plunged more than 16% to below 172,000 on Monday as Brazilian assets sold off following President Lula’s victory over Flavio Bolsonaro in the presidential runoff. The decline reversed the optimism that had supported markets since the first round, when Bolsonaro outperformed polling estimates and finished ahead of Lula. Investors had widely viewed a potential Bolsonaro administration as more likely to rein in public spending, considered essential to lowering interest rates. Markets are now reassessing fiscal risks, including persistent primary budget deficits and the trajectory of public debt, as well as institutional risks surrounding the electoral process. Losses were broad-based. Petrobras sank 16%, Itau dropped more than 15.5%, BB plunged over 31%, Itausa tumbled more than 16% and Axia retreated 19%. In contrast, Vale surged over 8% ahead of its earnings release after the market close. WEG gained 4% after announcing plans to acquire the PCS business of L&S Electric.