Peru's presidential election is close, stocks are falling, vote counting is entering its second day

Leftist congressman Roberto Sanchez edged closer to 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, Reuters reported.

With about 94 percent of the votes counted, Fujimori's tally fell to 50,01 percent, while Sanchez's total rose to 49,99 percent. Citizens voted in the election on Sunday against the backdrop of a shift to the right in Latin America.

Sanchez has been gaining ground since Sunday night in the vote count, as votes from rural regions of Peru continue to be counted.

Speaking to reporters outside her home in Lima on Monday, Fujimori said she was calm and urged patience.

"We will wait until the last (vote) and that's what I hope all Peruvians will do. I have a lot of hope," Fujimori said.

Sanchez has promised significant reform of Peru's economic system, which has shown resilience despite the country's political instability.

Shares of Peruvian companies listed in the US were lower. Buenaventura Mine fell 1,7 percent, while Credicorp fell 4,9 percent. Intercorp Financial Services fell 2,0 percent and the iShares MSCI Peru and Global Exposure ETF fell 1,5 percent.

The sol, Peru's currency, also fell 1,3 percent.

“Markets never like uncertainty, and this close outcome is likely to put pressure on Peruvian assets,” said Alexandre Robi, portfolio manager for emerging markets debt at Allianz Global Investors, adding that markets had begun to favor a Fujimori victory in recent weeks.

"We expect pressure on Peruvian markets until the vote is complete. Specifically, if Roberto Sanchez wins, we expect investors to factor in higher risk – wider credit spreads, higher local bond yields and a weaker Peruvian Sol," Robi said.

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

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

An early count by Ipsos, which has accurately predicted previous races, showed Sanchez leading with 50,3 percent to Fujimori's 49,7 percent. Ipsos officials said the result was still too close to declare.

Peru's ONPE electoral commission said a full count is expected to be completed by July.

Fujimori, who had previously tried to distance herself from her father's authoritarian, hard-line anti-crime policies, won the first round of voting in April while drawing on his legacy.

Peruvian voters have expressed concern about crime. Murder and extortion rates have risen, leading to widespread protests and the ouster of former President Dina Boluarte.

Political instability in Peru has led to a presidential rotation. The winner of the election will become Peru's ninth president in the last decade. Congress has removed three presidents in the last five years.

This is Fujimori's fourth time running in a presidential runoff. In 2021, she lost by about 45.000 votes, or just over 0,2 percent, to Pedro Castillo.

Chile, Argentina, Costa Rica and Ecuador elected right-wing presidents in recent elections, while Bolivia ended two decades of socialist rule in presidential elections last year.