Lula's victory triggers sell-off in the markets. Brazilian index drops 16% and losses reach Europe

Lula da Silva's re-election has triggered a significant sell-off in Brazilian markets, with the Bovespa index dropping 16%. This decline reflects investor disappointment and surprise at the election outcome, which contradicted pre-election polls. Major banks like Banco do Brasil and Itau saw steep losses, while Petrobras also fell sharply. The negative impact extended to European companies with Brazilian exposure, such as Telefonica and Santander, which experienced notable declines. Additionally, the Brazilian real weakened significantly against the US dollar and euro, indicating broader market concerns.