Brazil's Billionaire Bankers Lost $14 Billion in a Day After Lula's Upset Reelection Win

Brazil's stock market suffered its worst single-day decline since 2012 after President Luiz Inácio Lula da Silva, 80, won an upset victory to secure a fourth term, defeating conservative favorite Flávio Bolsonaro by a margin of about 4.4 million votes. The result caught markets off guard: trading on Brazil's stock exchange was temporarily halted the next session as losses mounted, and the Brazilian real fell roughly 8% in a single day.

The hit to personal fortunes was just as sharp. Brazil's ten richest people on Bloomberg's wealth index lost a combined $14 billion in one day, the steepest one-day drop the index has recorded since it launched in 2012.

Among the biggest individual losses, André Esteves, founder of Banco BTG Pactual, saw his fortune fall by $3.7 billion, bringing his total wealth to around $12 billion. David Vélez, who controls the digital bank Nu Holdings, lost $2.3 billion. Brothers Pedro and Fernando Moreira Salles, who control Itaú Unibanco, Brazil's largest bank, lost a combined $3 billion.

The sell-off did not spare Lula's own allies. João and Walter Moreira Salles, also tied to Itaú Unibanco and known as public supporters of Lula who had criticized other executives for meeting with Bolsonaro during the campaign, still lost a combined $1.2 billion as the market reacted to the result rather than to any individual's politics.

Investors are pricing in looser fiscal policy under a fourth Lula term, a shift that could limit how much room the central bank has to cut interest rates going forward. The currency's drop adds a second layer of concern, since a weaker real raises the cost of imports and adds to inflation risk just as the new administration settles in.