CORRECTED-UPDATE 1-Brazil markets gain as poll shows election headed for 2nd round

lunes 18 de agosto de 2014 11:53 GYT
 

(Corrects date of first round of elections to Oct. 5, not Oct. 3)

By Walter Brandimarte

RIO DE JANEIRO Aug 18 (Reuters) - Brazil's stocks and currency gained on Monday as an opinion poll showed President Dilma Rousseff, criticized by investors for her interventionist policies, is unlikely to win an outright re-election on Oct. 5.

Brazilian markets will probably remain volatile, however, as the poll also showed increased uncertainty about who is likely to face Rousseff in a second-round runoff: market favorite Aecio Neves or environmentalist Marina Silva.

Silva came statistically tied with Neves in a Datafolha poll, the first conducted after the death of her running mate Eduardo Campos in a plane crash last week. Her presidential bid is expected to be confirmed by the Brazilian Socialist Party in the next few days.

The poll also showed Silva winning by 4 percentage points over Rousseff in an expected second round on Oct. 26, still within the survey's margin of error.

While most investors were relieved that Rousseff now looks far from getting re-elected right away, many also expressed concern about Silva, whose views on a number of economic policy issues are little known.

"Financial markets are still unsure of what to make of all this," Neil Shearing, chief emerging markets economist at Capital Economics, wrote in a research note. "However, we suspect that it makes it less likely the election will trigger the wholesale reforms needed to revive Brazil's economy."

Other analysts still bet that Neves would make it to the second-round with Rousseff.   Continuación...