São Paulo stocks jump 8% and the real firms after Bolsonaro's first-round win

BREAKING: Brazil's Bovespa jumps 8% and the real strengthens after Flavio Bolsonaro's first-round win over Lula, with banks leading the rally.

Eight percent. That's what the Bovespa jumped in a single morning after Flavio Bolsonaro beat the polls.

São Paulo's index blew past 208,000 points, and the real firmed to 5.14 against the dollar. The banks went wild in New York before the open, Bradesco up 15 percent, Itaú up 14, Petrobras up 10. This is the exchange where it all happened, and traders there clearly liked what Sunday delivered.

The logic is simple. Investors think the senator will cut spending, which lets Brazil's sky-high interest rates come down. Lula spent the final stretch promising more social programmes, not less deficit. The market picked its horse.

But here's what I'd keep in mind. Four years ago the real jumped 4 percent after his father won a first round, and weeks later Jair lost the runoff to Lula anyway. Markets have celebrated a Bolsonaro in October before. October 25 decides if they were right this time.

This is Sara White, reporting for HIT.