Peru race tightens again and markets rise as overseas ballots pour in

Peru's presidential race tightened overnight with candidates now separated by less than 0.1% as overseas ballots are swinging the race back to conservative Keiko Fujimori, giving markets an early boost on Tuesday.

Peru's main stock index jumped by more than 7% Tuesday morning while U.S.-listed shares of Peruvian stocks like miner Buenaventura were up 8.2% and Intercorp Financial Services were up 12.9%; the iShares MSCI Peru and Global Exposure ETF jumped 6.7%.

The local sol currency was also up 2.45% against the dollar to 3.345.

The rise is largely a reversal of a sharp selloff on Friday after leftist Roberto Sanchez, who rattled markets and investors with proposals to revamp Peru's mining-heavy economy, rose in the polls.

He has advocated for reforming the constitution, imposing windfall taxes, a wealth tax and reforming mining concessions. While his rival Fujimori, has leaned into the tough-on-crime legacy of her father, Alberto Fujimori, Peru's authoritarian former president who was jailed for human rights abuses in connection with massacres under his tenure.

Fujimori led exit polls and the early count, but Sanchez gained ground on Sunday and Monday as votes from Peru's rural regions rolled in. Sanchez's lead rose to nearly 50,000 votes on Monday but is down to 20,000 as overseas ballots continue to be counted.

Sanchez currently leads with 50.06% to Fujimori's 49.94% with 95.95% of the vote counted. Alfredo Torres, the head of pollster Ipsos, said that while the remaining rural vote tends to favor Sanchez, a large part of the pending vote is from outside the country, which is favoring Fujimori.

About 1.67% of ballots have been flagged for review. Most are from the Lima metropolitan region, which also favors Fujimori.

"Doing the math, it's possible that the numbers we're seeing now could be reversed," Torres said, speaking to a local radio station.

Both candidates have called for patience and for 100% of the votes to be tallied. Peru's ONPE electoral authority said a full count is expected in July.