Brazil ETF soars in rare opening move on Bolsonaro election lead

The iShares MSCI Brazil ETF (EWZ) opened up by more than 10% Monday after Flávio Bolsonaro took a surprise lead over incumbent Luiz Inácio Lula da Silva in the first round of Brazil's presidential election, making him the clear favorite to win the runoff and take the country's economy to the right.

Bolsonaro, Rio de Janeiro's senator and the son of imprisoned former President Jair Bolsonaro, received a little over 47% of votes and da Silva got nearly 45%. With neither candidate securing 50% of votes required for a majority, they will head to a runoff election on Oct. 25.

The spike marks only the fifth time in its history that the fund has logged a double-digit opening surge, according to Bespoke Investment Group.

EWZ's 13% jump at the time of writing joins a rare historical list of major opening surges previously driven by the August 2002 IMF rescue package, the September and October 2008 global financial crisis interventions, and the March 2020 COVID-19 market turbulence.

Some of the fund's top holdings as of Oct. 2 include Cia Vale do Rio Doce (VALE), Nu Holdings (NU), Itau Unibanco Holding (ITUB), Petroleo Brasileiro (PBR), Banco Bradesco (BBD), B3 Brasil Bolsa Balcao (BOLSY), WEG (WEGZY), and Axia Energia (AXICY).

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