Volkswacht Bodensee - Brazil markets battered after Lula win, AI in focus elsewhere

Lula came from behind to win in the second-round vote, but his right-wing challenger Flavio Bolsonaro, the son of jailed ex-leader Jair Bolsonaro, has vowed to challenge the result.

Brazilian markets reeled as trading got under way, but pared some of the steepest losses by the close. The Sao Paulo stock exchange plummeted by 13.7 percent to near a two-month low, with the real down around 8.5 percent against the dollar.

"Instead of fiscal consolidation under Bolsonaro, Brazilian assets are instead going to have to contend with Lula's campaign pledges, including a shorter working week," said Chris Turner at ING bank.

Elsewhere, investors geared up for the week's crucial run of central bank decisions and tech earnings for major companies.

"The AI complex remains under a microscope ahead of what may be the most important stretch of earnings season so far," noted SPI Asset Management's Stephen Innes.

"Microsoft, Alphabet and Amazon are about to walk on stage, and this is not one of those quarters where a company can simply beat the number, raise the guidance by a whisker and expect applause. Investors want proof now.

"They want to know whether the billions going into the compute buildout are building a durable earnings machine or just a shinier version of the same old capex furnace," Innes added.

This week also sees the release of earnings from South Korean chipmakers SK hynix and Samsung.

- Testing investor appetite -

Results from Tesla and Meta last week stoked spending worries that weighed on stock markets.

Nevertheless, Meta announced Monday it was launching a stock offering that aims to raise $35 billion to fund its AI ambitions.

The parent company of Facebook and Instagram also announced plans to launch an additional stock offering of up to $60 billion, at a date yet to be determined.

Meta's shares fell by 1.88 percent at the close.

Anthropic, one of the world's leading artificial intelligence companies, on Monday made public its plans to sell shares on the stock market in mid-November.

The company reported first-half revenue up about 1,300 percent year-over-year, but also flagged safety risks.

Wall Street's main indices closed higher on Monday, with the tech-rich Nasdaq gaining 0.8 percent.

"Tech is once again mounting an attempt to rally, like a battered prize fighter getting up off the floor," said Chris Beauchamp, chief market analyst at online trading and investing platform IG.

"This bounce will be sorely tested in the days to come," he added.

Jose Torres of Interactive Brokers said investors were "embracing risk."

"Participants are reflecting a shift in demeanor regarding tech and AI, with recent turbulence offering bulls opportunities to raise exposures at cheaper prices," he said.

Europe's main indices closed higher, and Asia ended mixed after starting the day on the back foot following Friday's losses on Wall Street.

Oil prices hung around six-month highs amid supply concerns heading into the Northern Hemisphere winter.

"Rising oil prices are the kryptonite to any sustained rally in risk assets," said IG's Beauchamp.

Also in view this week are monetary policy decisions from the US Federal Reserve, European Central Bank (ECB) and Bank of Japan (BoJ), which are expected to hold rates steady.

The Bank of England is widely expected to hike in November after a jump in UK inflation ahead of the country's annual budget announcement due Wednesday.

- Key figures at around 2000 GMT -

New York - Dow: UP 0.3 percent at 52,361.58 points (close)

New York - S&P 500: UP 0.7 percent at 7,676.77 (close)

New York - Nasdaq Composite: UP 0.8 percent at 26,169.38 (close)

London - FTSE 100: UP 0.7 percent at 10,767.33 (close)

Paris - CAC 40: UP 0.8 percent at 7,847.32 (close)

Frankfurt - DAX: UP 0.9 percent at 25,410.84 (close)

Tokyo - Nikkei 225: DOWN 0.8 percent at 62,189.65 (close)

Hong Kong - Hang Seng Index: UP 0.5 percent at 23,211.81 (close)

Shanghai - Composite: UP 0.2 percent at 3,697.52 (close)

Brent North Sea crude: DOWN 0.8 percent at $115.81 per barrel

West Texas Intermediate: DOWN 1.5 percent at $101.76 per barrel

Euro/dollar: DOWN at $1.1182 from $1.1194 on Friday

Pound/dollar: DOWN at $1.3349 from $1.3372

Dollar/yen: UP at 157.45 yen from 156.87 yen

Euro/pound: UP at 83.78 pence from 83.71 pence

burs-aha/pnb

T.Zimmermann--VB