B3 halted trading Monday as the Ibovespa fell 13.88%

B3, the operator of Brazil’s main exchange, said on Monday that a circuit breaker had suspended trading. Its notice said cash equities, private fixed income, equity-referenced options, Brazilian depositary receipts, the Ibovespa and related indexes, the small-cap index and exchange-traded funds were halted for 30 minutes. Offers that were not already in an auction could be cancelled during the halt. Trading in those markets was to resume in an auction from 10:30 a.m. to 10:35 a.m. São Paulo time. B3 described the breaker as an operational procedure keyed to the Ibovespa, used when the market falls sharply. The notice itself does not state the size of the drop.

Reuters reported that the Ibovespa then closed down 13.88%, at 176,608.23, its largest one-day percentage loss since March 16, 2020, when the index fell 13.92%. Reuters said the day’s low was a drop of more than 17%, to 169,516.43. It said B3 told the market the halt was based on a theoretical opening price for the Ibovespa that pointed to a fall of more than 20%, and that the breaker had not been used since March 2020. The small-cap index fell 26.92% to 2,036.13, which Reuters called the largest one-day drop in that series, begun in 2005. Financial volume was almost R$114.9 billion, against a daily average of about R$57.5 billion already recorded this month, Reuters said.

Reuters tied the session to Sunday’s presidential runoff. It said Luiz Inácio Lula da Silva defeated Flávio Bolsonaro by 51.79% to 48.21% of valid votes, a margin of 4.4 million votes, and that investors had been positioned for the opposite result after Bolsonaro led the first round. That election count is the news agency’s account of the vote. The market move that followed is a separate fact. This article is not a view on the election or on Brazilian shares.

Among the closes Reuters listed, Banco do Brasil ordinary shares fell 29.33% to R$17.47, and a financial-sector index fell 22.48%. Magazine Luiza ordinary shares fell 58.23%. Petrobras preferred shares fell 8.18%. Vale ordinary shares rose 4.01%. The dollar finished at R$5.4066, up 8.36%. Those are reported prices, not a list of what to own.

Reuters also said Finance Minister Dario Durigan told the newspaper Estadão that the government will present a proposal to aim at the center of the fiscal target through the year, rather than the floor of the tolerance band. That is what Reuters reported Durigan said. It is not a published budget, and it is not a prediction of where Brazilian asset prices go next.