Tokyo Ibovespa ETF surges 9.40% after election

A Tokyo-listed fund tracking Brazil's benchmark Ibovespa equity index surged 9.40% at the open on Monday to 322 yen. The price for the Nomura NF Ibovespa Link ETF was recorded at 09:45 local time in Japan, corresponding to 21:45 on Sunday in Brasília.

The market move followed first-round presidential election results that placed Flávio Bolsonaro in the lead heading into a runoff against Lula. Investors viewed the outcome as boosting the opposition's chances in the race, raising market expectations for an economic policy shift focused on fiscal consolidation, lower future interest rates, and a weaker dollar.

The Japanese ETF replicates the Ibovespa basket, where Vale is the largest holding with an 11.8% weighting. Itaú Unibanco accounts for 8.5%, Petrobras preferred shares represent 6.1%, Petrobras common shares make up 4.4%, and Bradesco holds 4%. The fund's top ten holdings also include Axia, B3, Sabesp, BTG Pactual, and Itaúsa.