MercoPress. South Atlantic News Agency

Brazilian markets soar on prospects of a Bolsonaro victory next Sunday

Brazil’s benchmark Bovespa stock index jumped 4% to a nearly five-month high and the local currency, the real, gained 2.6% against the U.S. dollar

Brazilian markets soared for a second day on Wednesday on an opinion poll confirming right-wing presidential candidate Jair Bolsonaro was gaining steam ahead of Sunday’s vote and was on track to beat his likely leftist rival in a second-round runoff.

Brazil’s benchmark Bovespa stock index jumped 4% to a nearly five-month high and the local currency, the real, gained 2.6% against the U.S. dollar to its strongest level in almost two months. Brazilian interest rate futures also rallied on hopes that Bolsonaro would promote an orthodox economic policy in Latin America’s largest economy.

State-run companies led a rally across the board, with lender Banco do Brasil SA climbing 11% and oil company Petrobras rising 6%. Bolsonaro’s chief economic advisor has proposed privatizing both companies.

Local financial markets had already surged on Tuesday as a survey by polling firm Ibope showed Bolsonaro gaining ground. A survey from Datafolha, released after markets closed on Tuesday, confirmed the far-right lawmaker had made gains against leftist Workers Party rival Fernando Haddad.

In an increasingly polarized race, Datafolha also showed a climbing rejection rate for Haddad, who has replaced jailed former president Lula da Silva atop his party’s ticket.

At 41%, Haddad’s rejection rate is closing in on the 45% rejection of Bolsonaro, a former army captain who has defended Brazil’s 1964-1985 military government and angered many with misogynist and racist remarks. Still, the survey suggested Bolsonaro could edge out Haddad in an eventual run-off vote later this month, which would be required if none of the candidates wins a majority of valid votes on Sunday.