Brazil prepares for a tense vote in the run-off after Bolsonaro’s strong performance

RIO DE JANEIRO (Reuters) – Brazilian Jair Bolsonaro and his leftist rival Luiz Inacio Lula da Silva on Monday succeeded in waging an intense campaign over another four weeks in the deeply divided country, where the president’s unexpectedly strong showing kicked off in October. 30 vote run-off.

Lula, a two-term former president imprisoned on corruption charges that were later invalidated, won most votes In Sunday’s presidential election, for many he remains the favorite for re-election later this month.

But Bolsonaro’s better-than-expected performance has revitalized his campaign, lending credence to his claims that pollsters have been mistaken in disqualifying Brazil’s fraught elections since the end of military rule in 1985.

The far-right leader’s strong performance also perpetuated questions about whether Brazil’s democratic institutions would be able to counter his unfounded claims that the country’s voting system could not be trusted.

Marcia Oliveira, 69, was walking her dog in Rio de Janeiro’s Lagoa neighborhood, angry at how polls misread Bolsonaro’s support.

“The survey companies have no credibility,” she said.

Most polling firms had given Lula a 10-15 point lead before Sunday’s vote, raising the possibility of the left winning the first round. But with 99.99% of the electronic vote counted, Lula got 48.4% of the vote against Bolsonaro’s 43.2%, meaning neither of them got more than 50% of the vote needed to avoid a runoff.

The remaining votes went to nine other candidates who have now been disqualified from the race.

Bolsonaro’s right-wing liberal party (PL) won 99 seats in the 513-member House of Representatives, up from 77, and right-leaning parties allied with Bolsonaro now control half of the room. A party spokesman said Hizb ut-Tahrir candidates won 13 of the 27 seats in the Senate, with two more likely in the runoff.

The result sparked a turbocharge in Brazilian markets, amid expectations that it could force Lula to move into the middle and restrict his room to make drastic policy changes even if he finally wins. The Brazilian real rose nearly 3.5% against the dollar in morning trade, while the Ibovespa stock index rose (.BVSP) rose 4%.

State-run companies led gains in Brazil’s main stock index, with shares in oil giant Petrobras (PETR4.SA) The lender Banco do Brasil (BBAS3.SA) It jumped about 8%. Investors are betting that a possible second Bolsonaro term could see a wave of privatization.

The support of the distant third and fourth place also fell short of recent polls, suggesting that some of their supporters may have turned to Bolsonaro when it came time to vote.

Attention will now turn to who will send their votes to centrist Senator Simon Tibbett and former center-left Representative Ciro Gomez. Tibet received 4% of the vote, while Gomez received 3%. Both said Sunday evening that they would announce decisions on acclamation in the coming days.

After his unexpected rise, many analysts said the electoral momentum is now with Bolsonaro. If he manages to make a dramatic comeback, it will interrupt the wave of victories leftists have enjoyed across the region in recent years, including in Mexico, Colombia, Argentina and Chile.

Capital Economics said in a note that Lula remains the front-runner to be elected. But she said Bolsonaro and his allies’ “surprisingly strong performance” would pose severe obstacles to governing Latin America’s largest country.

“This should help allay fears of a sharp turn to the left,” she wrote.

On Sunday night, Bolsonaro adopted a more political tone as usual, expressing confidence that victory is at hand and avoiding his usual baseless attacks on Brazil’s voting system. In the run-up to the vote, he made unsubstantiated claims about the integrity of the electronic voting system and suggested that he could not concede if he lost.

“I plan to make the right political alliances to win this election,” he told reporters, referring to the significant progress his party has made in Congress.

Lula was upbeat about the outcome, saying he was looking forward to another month in the election campaign and the opportunity to discuss Bolsonaro face to face.

But within his campaign, there was palpable frustration that he failed to achieve a hoped-for outright victory, as well as poor results in state races outside his party’s traditional stronghold in the Northeast.

“There has been a clear movement of votes in the southeast that goes beyond what the polls and even the campaign have been able to detect,” said a source in the campaign, who asked not to be identified.

“It is clear that Bolsonarismo has been underestimated,” said Senator Humberto Costa, an ally of Lula’s Labor Party.

Additional reporting by Gram Slattery and Gabriel Stargardter in Rio de Janeiro Additional reporting by Lisandra Paraguasso, Gabriel Araujo and Eduardo Simos in Sao Paulo and Ricardo Brito and Maria Carolina Marcelo in Brasilia.

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