Peru Leftist Signals Victory in Election That Rattled Markets

(Bloomberg) -- Peru’s leftist presidential candidate Pedro Castillo indicated his party won Sunday’s election, his strongest comments yet about the result of a vote that has roiled markets in the South American country.

“According to the report of our representatives, we already have the official party count of the votes where the people have imposed themselves on this feat,” Castillo told followers outside his headquarters on Tuesday evening. He asked backers “not to fall into provocation” and said the business sector was showing support for the party.

Peruvian markets rebounded Tuesday after Castillo sought to reassure investors who were preparing for a drawn-out count of Sunday’s vote. Benchmark bonds pared more than half of Monday’s decline after he sent a statement saying he would pay the country’s debt and keep central bank independence. The sol, which on Monday posted its worst single-day performance in a decade, edged higher along with the main stock gauge.

Castillo has expanded his lead to about 96,000 votes with nearly 98% of ballots counted, according to the latest official tally. His opponent, the market favorite Keiko Fujimori, said the rival party has been “distorting or delaying” the results of the election. She provided no evidence to back up her claim, but said she would do so. Fujimori, who lost by a razor-thin margin in the 2016 runoff, has said that she regrets not seeking a recount five years ago.

Peru is headed for days of political uncertainty as the final votes are tallied and officials contend with any sustained dispute. But the small number of votes separating the contenders also provided relief to investors encouraged by the idea that neither candidate would have the political mandate to overhaul one of South America’s steadiest economies.

Fujimori, who is under investigation for corruption and campaigned while out on bail, has vowed to save the country from “communism” by preserving a liberal economic model and boosting cash payments to families affected by the pandemic.

Castillo, by contrast, has pledged to increase taxes on mining and oil companies to invest on education and health. He blames the country’s inequality on the ruling elite whom he says has long been content to run Peru from Lima while ignoring large swathes of the country.

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