As is often the case anywhere else, political drama in Brazil is undermining the country's equity markets. Against projections that conservative rival candidate Flavio Bolsonaro would prevail, on Sunday, left-leaning Luiz Inacio Lula da Silva was reelected as the South American nation's President for a fourth (albeit non-consecutive) term, defying recent right-leaning election results in nearby nations like Colombia, Peru, Chile, and Bolivia. It's not just pro-capitalism Bolsonaro's election loss that's behind the bulk of today's selling, however, that's dragged the broad-based iShares MSCI Brazil ETF (NYSEMKT:EWZ) down nearly 23% today. It's the uncertainty that's now potentially going to follow. Bolsonaro is seeking a legal annulment of the results due to the decision from Brazil's supreme court to extend voting by two hours in areas where heavy rainfall that may have delayed voters from being able to reach their designated voting stations during scheduled voting. Bolsonaro's legal argument isn't particularly strong, however. In fact, his own campaign even called for polls to remain open for longer than initially intended for the very same weather-related reasons.
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