Some of Brazil's largest hedge fund managers say they are feeling more optimistic about the prospects for the country's economy following the first round of voting in the Presidential election, according to a report by Bloomberg.

The 2 October revealed a closer gap between front-runner Luiz Inacio Lula da Silva and incumbent Jair Bolsonaro than many had been expecting which, coupled with the strong performance by right-wing parties in the country's Congressional elections, has left some managers feeling that a major turnabout in the fortunes of Latin America's largest economy is now less likely.

The thinking is that if elected, leftist leader Lula will have a tougher time implementing more radical measures than originally thought.

Absolute, Adam Capital, Bahia Asset Management, Genoa Capital, Ibiuna Investimentos, Kapitalo Investimentos, Legacy Capital, SPX Capital, and Verde Asset Management have all expressed a more bullish outlook in their latest investor briefings.

A run-off vote to decide Brazil's next president will take place between Lula and Bolsonaro on 30 October.