Bloomberg
Brazilian stocks and the real whipsawed higher and lower after a plane used by opposition presidential candidate Eduardo Campos crashed in Sao Paulo state.
Campos’s campaign confirmed it couldn’t reach him after a small plane went down in the port city of Santos, while Globo News and Folha de S. Paulo reported that the candidate had died. Campos, who was polling in third place ahead of the October elections, was flying to an event in the city of Guaruja at the time, according to O Estado de S. Paulo newspaper.
Related: Brazil Presidential Candidate Campos Reported Dead in Crash
Stocks and the real plunged initially before paring losses as investors sought to quickly analyze the impact the crash would have onBrazil’s presidential vote. The stock gauge had rallied 26 percent from this year’s low March 14 on speculation that President Dilma Rousseff would be defeated and the new government would reduce intervention in state-owned companies.
“Elections are the main driver for the market now, but without Campos, uncertainty increases,” Rogerio Freitas, a partner at hedge fund Teorica Investimentos, said by phone from Rio de Janeiro. “And the market will only find a direction once new polls become available.”
Campos, 49, the former governor of Pernambuco state, was traveling from Rio de Janeiro when the crash occurred at about 10 a.m. local time. Nine people were killed, Brazil’s Military Police said, without identifying the victims. Television images showed overcast and rainy weather in Santos.
Opinion Poll
A poll by public opinion research company Ibope, released Aug. 7, showed support for Rousseff before the Oct. 5 election unchanged at 38 percent. Campos would win 9 percent of votes in the first round of elections, the poll showed.
The benchmark Ibovespa equity gauge was little changed at 56,449.36 at 2:11 p.m. in Sao Paulo, after sinking as much as 2.1 percent. Volume was 61 percent higher than average for the time of day.
State-run oil producer Petroleo Brasileiro SA, known as Petrobras, sank 1 percent to 19.48 reais. The real gained 0.2 percent to 2.2722 per dollar, after earlier losing as much as 0.7 percent.
Yields on Brazil’s benchmark fixed-rate local bond due in 2017 edged up 0.01 percentage point to 11.7 percent.
“The market is reacting amid a mix of cautiousness and nervousness,” Silvio Campos Neto, an economist at Tendencias Consultoria Integrada, said in a telephone interview.
Street Protests
Campos made his debut in politics at age 21, when he campaigned for Miguel Arraes, his grandfather and former Pernambuco governor. As a legislator in Congress he successfully pushed a bill that cut pension benefits and, as President Luiz Inacio Lula da Silva’s science minister, a measure that allowed stem cell research.
Campos quit Rousseff’s governing coalition in September in the aftermath of street protests that pushed the government’s popularity to record lows. He surprised political leaders and analysts by announcing an alliance with former Environment Minister Marina Silva, who placed third in the 2010 presidential race and has strong support among young, urban voters. Silva received 19 percent of the votes in the first round that year, and didn’t support anyone in the runoff.
“I think Marina will be the candidate now, and she’s a strong candidate, stronger even than Campos was because she’s more well known,” Luiz Carvalho, a managing partner at New York-based Tree Capital LLC, said by phone. “I think she’ll have a large appeal with the lower classes, and her voting intentions will be considerable. Dilma’s situation for a second round is now worse.”