Sanchez takes lead in Peru’s tight presidential vote as stocks dip

By Alexander Villegas and Marco Aquino

LIMA, June 8 (Reuters) – Leftist congressman Roberto Sanchez has taken a slim lead against conservative Keiko Fujimori in Peru’s presidential race on Monday as official vote-counting continued into a second day, sending markets and mining stocks lower.

With about 94% of votes tallied, Sanchez rose to 50.01%, while Fujimori dropped to 49.99%. Voters cast ballots in the election on Sunday against a backdrop of a rightward shift in Latin America.

Fujimori led early results and exit polls, but Sanchez has been gaining ground since Sunday night in the vote count, as ballots from Peru’s rural regions continue to be counted.

“We’re confident and optimistic, but we’ll wait for 100% of the vote,” Sanchez said on Monday, speaking to reporters at Congress moments before the race flipped. “What comes next is working for the country because Peru’s political instability needs to stop.”

Earlier in the day, outside her home in Lima on Monday, Fujimori said she was calm and called for patience.

“We’re going to wait until the last (vote) and that’s what I hope all Peruvians do. I have a lot of hope,” Fujimori said. Several international polling station have yet to be counted, which are expected to favor Fujimori.

Sanchez has vowed a significant overhaul to Peru’s economic system, which has proved resilient despite the country’s political turmoil. 

U.S.-listed shares of Peruvian companies were down. Miner Buenaventura fell 1.7%, while Credicorp was down 5.9%. Intercorp Financial Services fell 0.3% and iShares MSCI Peru and Global Exposure ETF was down 1.1%.

“Markets never like uncertainty, and this tight outcome is likely to lead to pressure on Peruvian assets,” said Alexander Robey, a portfolio manager of emerging market debt at Allianz Global Investors, adding that markets had come to favor a Fujimori win in recent weeks.

“We expect pressure on Peruvian markets until the vote is finalized. Specifically, if Roberto Sanchez wins, we expect investors to incorporate more risk premium – wider credit spreads, higher local bond yield and a weaker Peruvian Sol,” Robey said.

In addition to constitutional changes, Sanchez has proposed reforming large mining concessions. Peru is the world’s third-largest copper producer and a major producer of gold, silver and zinc.

Fujimori had a slight lead in exit polls and early results, but her lead dwindled as the count reached its final stretch. 

An early tally by pollster Ipsos, which has accurately predicted previous races, showed Sanchez leading with 50.3% compared to Fujimori’s 49.7%. Ipsos representatives said the result remained too close to call.

Peru’s ONPE electoral authority said a full count was expected to be completed by July. 

Fujimori, who previously tried to distance herself from her father’s authoritarian, tough-on-crime policies, won the first round of voting in April as she leaned into his legacy.

Peruvian voters have expressed concern over crime. Rates of homicide and extortion have soared, leading to widespread protests and the ouster of former President Dina Boluarte.

Peru’s political turmoil has led to a revolving door of presidents. The winner of the election will become Peru’s ninth president in the past decade. Congress has removed three presidents in the past five years.

This is Fujimori’s fourth time in a presidential runoff. In 2021, she lost by about 45,000 votes, or just over 0.2%, to Pedro Castillo.

Chile, Argentina, Costa Rica and Ecuador all elected right-wing presidents in their latest elections, and Bolivia ended two decades of socialist rule in last year’s presidential contest.

(Reporting by Alexander Villegas, Marco Aquino and Aida Pelaez-Fernandez; Additional reporting by Lucinda Elliott and Karin Strohecker; Editing by Louise Heavens, Emelia Sithole-Matarise, Will Dunham and Alex Richardson)