Ibovespa enters election with 11.5% pre-vote drop, no historical return premium

Brazil's Ibovespa has fallen 11.5% in the six months before the first round, versus a 2.2% average in prior cycles (2006-2022), per Nomad. This suggests elevated election risk is already priced, with no historical premium for post-election gains. The market's reaction will hinge on the outcome and fiscal policy signals.