Peru Presidential Election Tightens in Poll After Deadly Attack

Peru’s stocks headed for their biggest gain in six months, and its bonds and currency also rallied as a poll showed the lead for leftist front-runner Pedro Castillo virtually disappearing.

Castillo would get 42.6% of the vote in the June 6 runoff compared with 41.7% for Keiko Fujimori, in a vote simulation conducted by Datum and published Friday in Gestion newspaper. The 0.9 percentage point gap is within the margin of error, and compares with a gap of 5.4 percentage points last week.

Peru Presidential Election Tightens in Poll After Deadly Attack

Peru’s benchmark stock index climbed 5%, while the sol strengthened 1.6% against the dollar, making it the best-performer among emerging market currencies. Local currency bonds also rallied.

Castillo, from a Marxist party, is feared by many investors, and the nation’s assets have been whipsawed in recent weeks, with a sell-off whenever polls show him gaining ground.

The murder of 16 people in a rural, cocaine-producing region of Peru may have influenced some voters over the past week. The Armed Forces blamed the Shining Path terrorist group for the attack though details of the incident remain sparse.

Fujimori advocates a tough line on security, and her campaign team jumped on the event to try to associate Castillo and his party with Shining Path and splinter groups that operate in the area.

Castillo condemned the incident while also rejecting alleged links to armed groups that control a large part of the illicit drug trade in the country.

The poll of 1,201 people was conducted between May 25 and 27 with a margin of error of 2.8 percentage points.

Voter intention, a slightly different measure of support, showed a virtual tie of 41.6% versus 41.5% in favor of Castillo. The number of people who plan to spoil their ballot climbed to 10.9%.

Polling firm Ipsos will publish another poll early Sunday ahead of a head-to-head debate between the candidates that evening.

Peru Presidential Election Tightens in Poll After Deadly Attack

The number of people who say they would never vote for Fujimori has fallen in recent weeks, according to Urpi Torrado, the general manager of Datum. Even so, this so-called “anti-vote” is still higher for her than for Castillo, the latest poll shows.

At the same time, more voters who were previously skeptical about the attacks on Castillo are inclined to believe them, Torrado added.

“The debate between the candidates on Sunday could end up tipping the balance,” she said, speaking by phone from Lima.

Shining Path

Castillo, a former school teacher, is promising to seek more from multinational miners to spend on education and health. Fujimori, a former lawmaker who has narrowly lost two previous runoffs and has been charged with graft, is running on a law and order campaign that often invokes memories of her father’s presidency that was marked by clashes with Shining Path.

When Datum asked why Shining Path carried out the attack, 24% said it was to push for a boycott of the elections, 23% didn’t know, 22% said it was to threaten people to not vote for Fujimori while 20% said Shining Path wasn’t responsible for the incident.

When Datum asked whether they believe that an organization accused of being related to Shining Path forms part of Castillo’s political alliance, 43% answered yes, 42% said no, while another 15% said they didn’t know.

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