Shares of exchange-traded funds that focus on Brazil were falling Monday morning, after rioters supporting former Brazilian President Jair Bolsonaro stormed the country’s Congress over the weekend following his loss to newly inaugurated Luiz Inácio Lula da Silva.
The iShares MSCI Brazil ETF EWZ,
The U.S. dollar jumped 1.2% versus the Brazilian real USDBRL,
Far-right politician Bolsonaro lost Brazil’s presidential election last year to leftist Lula, who was inaugurated at the start of this month. The Associated Press reported that rioters on Sunday were seeking military intervention to oust Lula or restore Bolsonaro to power in a chaotic scene of destruction reminiscent of the U.S. Capitol insurrection on Jan. 6, 2021.
Brazilian authorities were investigating Monday after thousands of Bolsonaro supporters stormed and trashed government buildings that also included the Supreme Court and presidential palace, the AP said, describing destruction such as broken windows, toppled furniture, a punctured paintings, thrown computers and vandalization of an iconic statue.
The iShares MSCI Brazil ETF had climbed after Lula won Brazil’s presidential election in a runoff vote in late October.
Read: Brazil ETF climbs after Lula wins Brazil’s presidential election
Bolsonaro flew to the U.S. two days before Lula’s Jan. 1 inauguration, taking up a temporary residence in Orlando, according to the AP report.
“Bolsonarism mimics the same strategies as Trumpism. Our Jan. 8 — an unprecedented manifestation in Brazilian politics — is clearly copied from Jan. 6 in the Capitol,” Paulo Calmon, a political science professor at the University of Brasília, was quoted as saying in the AP report. He referred to Bolsonaro as the “Trump of Latin America.”
See: ‘We stand with Brazil,’ say Biden, Trudeau and Lopez Obrador after attacks on government buildings
The top three holdings of the iShares MSCI Brazil ETF as recently as Jan. 6 were metals and mining company Vale that are listed in Brazil, financial-services firm Itau Unibanco Holding ITUB4,
“While political risk is typically elevated in Brazil and could weigh on local asset prices, we believe Brazil’s ‘January 6 moment’ will not have a long-lasting impact on local financial markets” or the economy, said Brendan McKenna, an international economist at Wells Fargo, in a note Monday. “In our opinion, the effort to overturn the outcome of the election will prove futile, as the transition of power to Lula has already been finalized and he is unlikely to resign.”