Brazil’s House Backs Tax Reform, Sending Local Markets Rallying

Brazil’s lower house approved a proposal to overhaul the country’s labyrinthine tax rules, fueling a rally in the local stock and currency markets.

Lawmakers voted 375-113 to advance the bill in a second round of voting that took place in the early hours of Friday. The reform, which has eluded Brazilian politicians for decades, is among the priorities of President Luiz Inacio Lula da Silva’s administration.

The benchmark Ibovespa equity index gained 1.2% in early afternoon trade as the bill’s approval added to prospects of interest rate cuts and cheap valuations. The Brazilian real strengthened 1.1%, the second-best ...