WRAPUP 1-Brazil stocks, currency plunge as Rousseff gains in poll
By Asher Levine
SAO PAULO, Sept 29 (Reuters) - The Brazilian real touched its weakest level in nearly six years on Monday while the benchmark Bovespa stock index was on track for its biggest one-day drop in over three years after an election poll showed President Dilma Rousseff gaining on challenger Marina Silva ahead of Sunday's election.
The poll, released late Friday by research firm Datafolha, showed Rousseff advancing in first-round vote intentions, rising to 40 percent from 37 percent a week earlier and increasing the chances she could win outright without a second round. Silva's first-round support fell to 27 percent from 30 percent.
In a potential second round, where Silva had once led by as much as 10 points, Rousseff held 47 percent against Silva's 43 percent.
Brazilian investors have been heavily critical of Rousseff's government for enacting policies that have gone against minority shareholder interests in state-run companies and a tendency to enact one-off stimulus measures rather than structural reforms.
The real plunged as much as 2.54 percent in early trade to 2.478 per dollar, its weakest level since late 2008, before paring losses to about 1.5 percent.
Many traders see Brazil's risk premium declining under a different administration, which would help attract foreign investment and support the real.
"If (Dilma's advance) is reconfirmed in the next polls, the sky is the limit for the dollar," said Mario Battistel, head of currency trading at Sao Paulo brokerage Fair, adding the real could pass 2.50 per dollar in the short term.
The real was also reversing from a late Friday rally triggered by rumors that a weekly magazine would unveil a new scandal that could damage Rousseff's re-election chances. The market chatter proved largely exaggerated. Continuación...