“There’s still a lot of doubts regarding Silva’s government program and views, but investors are focusing now on the fact that there are less chances of Rousseff winning,” Guilherme da Nobrega, the chief economist at the brokerage firm Guide Investimentos, said by phone from Sao Paulo. “We’ve got to wait to get a better idea of her proposals to see how good or bad a Silva administration would be for the economy.”

Silva’s party, PSB, will probably appoint her as a presidential candidate after Eduardo Campos died in a plane crash on Aug. 13, newspaper O Estado de S. Paulo reported today, without saying how it got the information. Silva was Campos’s running mate. She came in third in the 2010 presidential election with 19.6 percent of the votes.

Eoin Treacy's view

Brazil is likely to be a beneficiary of increased geopolitical tension in Europe not least if it results in further sanctions being levied against Russian interests. The potential for a change of government to an administration capable of imposing the reforms required to reignite growth represents an additional cause for optimism.

The Bovespa Index rallied to break a lengthy progression of lower rally highs last month and a sustained move below the 200-day MA, currently near 53,000 would be required to question medium-term recovery potential.

Petrobras' ADR found support this week in the region of its 200-day MA and a sustained move below $15 would be required to question medium-term recovery potential.