Luiz Inácio Lula da Silva has won an unprecedented fourth term as Brazil's president, overturning a first-round deficit to beat Senator Flávio Bolsonaro in a runoff that split the country almost evenly.
Lula took 51.8% of valid votes to Bolsonaro's 48.2%, according to the Superior Electoral Court, with nearly all ballots counted on Sunday.
The results are also historic, as it's the first time since Brazil returned to direct elections in 1989 that a candidate has won the final runoff after losing in the first round.
Bolsonaro refused to concede defeat, saying he would seek the annulment of the outcome, Reuters reported. He also said a ruling by the Supreme Court Justice Cristiano Zanin to extend voting for two hours was "unacceptable," according to the report.
The election process was marred by allegations of voter suppression, with Lula's campaign reporting suspended public transportation in some key areas, prompting the court to extend voting by two hours. Bolsonaro's campaign had also requested an extension, citing heavy rains that shut polling stations in the south, a right-wing stronghold.
The victory of the 80-year-old leftist, who had trailed in the first round, blocks a rightward shift in Latin America that U.S. President Donald Trump has backed. Lula is set to govern from 2027 to 2030, facing a Congress where Bolsonaro's Liberal Party holds the largest bench in decades, and with substantial public debt that he must stabilize.
Brazil, under Lula's leadership, has grappled with worsening fiscal health and mounting public debt driven by elevated cost of servicing the debt and rigid mandatory spending. Gross debt reached 82.9% of the country's GDP in August, the highest since March 2021, according to the Central Bank of Brazil.
The iShares MSCI Brazil ETF (EWZ) plunged nearly 20% in overnight trading following Lula's win, before paring losses, last down 18%.
Analysts had expected a rally in Brazilian assets before Sunday's election results, with Bolsonaro holding a narrow lead earlier this month. Chris Turner, Global Head of Markets and Regional Head of Research for UK & CEE at ING, had forecast both the currency and bond markets to rally, citing Bolsonaro's fiscal austerity and deregulation.
Lula's victory came the same day as Serbia's long-serving strongman leader, Aleksandar Vucic, conceded defeat in a parliamentary election to the student-led opposition movement, ending 14 years of leadership.