EMERGING MARKETS-Brazil markets sink on Rousseff re-election
(Updates prices to close, adds Bovespa afternoon move)
By Asher Levine and Walter Brandimarte
SAO PAULO/RIO DE JANEIRO Oct 27 (Reuters) - Brazilian financial markets fell on Monday as leftist President Dilma Rousseff's re-election victory dashed investor hopes of significant policy changes over the next four years.
Brazil's real closed at a 9-1/2-year low. Local stocks pared losses after a sharp opening drop, though shares of heavyweight state-run oil firm Petrobras posted their biggest one-day decline in nearly six years.
The outlook for Brazilian assets will now likely depend on whether Rousseff signals policy tweaks to boost a flagging economy, as hinted in a conciliatory first speech she gave after defeating pro-business challenger Aecio Neves on Sunday.
After the most divisive and tightest campaign since Brazil returned to democracy three decades ago, Rousseff won 51.6 percent of votes in a runoff against Neves, who won 48.4 percent support.
"While Rousseff's victory speech carried a conciliatory tone and invitation for debate and change, her ability to regain credibility will require more than just words," said Flavia Cattan-Naslausky, a strategist with RBS Securities.
Brazilian markets will only stabilize, she said, once Rousseff announces "concrete policy initiatives" and makes appointments to government positions such as the finance ministry and the central bank.
Most analysts remain skeptical, however, as Rousseff's first term saw little in the way of significant economic reforms. Continuación...