Lula Wins Fourth Term in Brazil as Flavio Bolsonaro Refuses to Concede and Petrobras Drops Over 10%

Brazilian President Luiz Inacio Lula da Silva won a fourth term on Sunday, the electoral court announced. The result defied polls and the global mood against incumbents, and it slows a wave of right-wing victories across Latin America. He beat Senator Flavio Bolsonaro, eldest son of jailed ex-president Jair Bolsonaro, by more than 4 million votes, even though Bolsonaro led the first round. Lula is the first candidate since the 1980s return to democracy to win after finishing second in round one.

Bolsonaro Seeks Annulment of the Election Result

Bolsonaro refused to concede and said he will ask for the result to be annulled over a Supreme Court justice’s ruling that extended voting by two hours. His losing margin is more than twice his father’s in 2022, and his own campaign had asked for the extension because of rain in the conservative south, so analysts call annulment unlikely. RANE analyst Mario Braga said protests are possible, but a reversal is very improbable.

Petrobras and Brazilian Stocks Fall After Lula Victory

Investors are unwinding bets on a change of government. Petrobras (PBR) shed more than 10%, a Tokyo-listed ETF tracking the Bovespa index dropped nearly 15% in Asian trade, and the real was set to fall sharply against the dollar.

Challenges Ahead for Lula’s Fourth Term

Lula faces the most conservative Congress since the 1980s, with Liberal Party allies possibly holding over 280 lower house seats. The government forecasts growth of just 2.3% next year, and public debt has passed 82% of GDP. Goldman Sachs expects only modest progress on spending control.