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Brazilian Stocks, Real Rally as Traders Root for Impeachment

  • Lula detained during Brazil police raid into graft scandal
  • Bradesco, Itau, Petrobras contribute most to Ibovespa's gain
Bloomberg business news

Former Brazil President Lula Detained in Probe

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Brazil’s stocks led world gains and the real rallied as traders bet that a change in government may be closer than ever after months of political gridlock that has prevented lawmakers from focusing on kick-starting the stalled economy and closing a crippling budget gap.

The rally was triggered by news that former President Luiz Inacio Lula da Silva was detained for three hours after heavily armed police raided his home in a sweeping corruption probe, fueling speculation that support will grow to impeach his successor, President Dilma Rousseff. While markets have been split in the past about whether a Rousseff ouster would be good or bad, many now say it may be the only way out of the political quagmire.