Brazilian stocks jumped to the highest level on record Monday following a decisive victory for free-market proponent Jair Bolsonaro in yesterday's Presidential elections that could trigger moves to privatize some of Latin America's biggest companies amid broader economic reforms.

Bolsonaro, the first candidate with military experience to lead Brazil since the mid 1980s, has vowed to tackle corruption, crime and 'elitism' in the world's fourth-largest democracy, won 55.2% of Sunday's vote in a run-off against left-wing rival Fernando Haddad. The 64-year old former Army captain has also said he wants broader fiscal reforms in Latin America's biggest economy and will likely appoint the highly-respected Paulo Guedes in the country's top fiance post. 

"Financial markets should react very favourably to the news, despite concerns about the candidate's perceived authoritarian tendencies and conservative moral stance," said ING economist Gustavo Rangel. "We have strong conviction that Bolsonaro will prioritise the confidence-boosting fiscal reforms that Brazil urgently needs, as he actively campaigned on them, but we also have doubts about his ability to get them approved in Congress. The election result leaves Bolsonaro with strong political capital and a mandate to implement reforms."

Had a very good conversation with the newly elected President of Brazil, Jair Bolsonaro, who won his race by a substantial margin. We agreed that Brazil and the United States will work closely together on Trade, Military and everything else! Excellent call, wished him congrats!

— Donald J. Trump (@realDonaldTrump) October 29, 2018

Brazil's benchmark Bovespa index in in Sao Paulo  gained more than 3% in the opening minutes of trading to rise past 88,377 points, the highest on record, extending its month-to-date gain past 12%. 

The iShares MSCI Brazil Index ETF  (EWZ - Get Report) was marked 3% higher in pre-market trading in New York Monday, indicating an opening bell price of $42.42 each, the highest since April 27 and move that could erase most of its losses for the year.

U.S. listed shares of  Petrobras SA (PBR - Get Report) , the thirteenth-largest oil company in the world, were seen 3.7% higher at $16.84 as investors bet Bolsonaro could begin moves to part-privatize Brazil's biggest company. The stock rose 3.7% in early Sao Paulo trading, alongside gains for Banco do Brazil, mining giant Vale SA (VALE - Get Report) and aerospace giant Embraer (ERJ - Get Report) . 

The Brazilian real was little-changed at 3.6429 against the U.S. dollar Monday, but has risen more than 13% since early September as Bolsonaro's election chances improved.

"Bolsonaro is seen as a far-right candidate but he has campaigned strongly for fiscal and government reforms to improve the outlook for the Brazilian economy, which represents something that we can expect investors to buy into," said FXTM currency strategist Jameel Ahmad. "Some of the reforms that Bolsonaro has pledged might not be as easy to implement as what will be priced into the Real right away. But he is seen from the standpoint of the financial market as a "Donald Trump" type that pushes pro-growth policies and this is overall seen as a positive outcome for the Real."