Brazil’s stock market has joined the horror story created by a sell-off of the country’s currency, the real, which has sunk to levels not seen since the country’s impeachment crisis two years ago.
The Ibovespa benchmark stock index fell as much as 6 per cent by mid-afternoon on Thursday, recovering slightly by late afternoon to trade down 3.72 per cent at 73,283.94 points.
The real, meanwhile, weakened to as much as R$3.95 against the dollar before trading at about R$3.91 in late trade, down about 1.5 per cent on the day, 4 per cent in two days and about 15 per cent since the start of the quarter. It has not been at these levels since the political crisis leading to the impeachment of leftist former president Dilma Rousseff in 2016.
The dramatic reassessment by markets of Brazil follows the country’s introduction of price controls for fuel after a truckers’ strike, seen as a throwback to previous leftwing policies, and early polls showing extreme candidates from the left and right leading in elections in October.