Humala leads Peru vote, rivals battle for run-off spot

* Leftist Humala ahead with 27.62 percent

* Ex-banker Kuczynski, Fujimori in tight race for second

* Humala could struggle to beat either rival

By Terry Wade and Patricia Velez

LIMA, April 11 (Reuters) – Left-wing nationalist Ollanta
Humala led the first round of Peru’s presidential election early
on Monday, with two pro-business rivals battling for second place
and the chance to challenge him in a June 5 run-off, according to
official results.

With 50 percent of ballots tallied after Sunday’s vote,
officials said Humala had 27.62 percent of the votes, followed by
former Wall Street banker Pedro Pablo Kuczynski at 23.11 percent
and rightist lawmaker Keiko Fujimori at 21.95 percent.

Three earlier unofficial samplings of ballots, however, showed
Humala with a wider lead and Fujimori advancing to the run-off
with a lead of 2 to 4 percentage points over Kuczynski.

Despite a decade-long economic boom, a third of Peruvians live
in poverty and many rallied behind Humala, a former army officer
who has positioned himself as a man of the people facing rivals
backed by big business.

“We want the wealth of Peru to be well distributed,” said Juan
Urteaga, 18, from the Andean city of Cajamarca. “How is it that my
city is close to one of the world’s biggest gold mines, Yanacocha,
but my city has one of Peru’s highest poverty rates?”

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Polls suggest both Fujimori and Kuczynski would have trouble
defeating Humala in a second round vote and economic analysts said
Sunday’s results might hit Peruvian asset prices.

Fujimori, 35, supports existing free-market policies, but is
shunned by many Peruvians because her father, former president
Alberto Fujimori, is in prison for corruption and human rights
crimes stemming from his crackdown on guerrillas in the 1990s.

Kuczynski, 72, a former prime minister known as “El Gringo”
because of his European parents, would have trouble gaining
traction outside of Lima, where he is strongly backed by wealthy
voters.

Humala, a former army officer who led a short-lived military
revolt in 2000, has softened his anti-capitalist tone since
narrowly losing the 2006 elections.

“We are willing to make many concessions to unite Peru, we are
going to talk with all political forces,” Humala told cheering
supporters. “Social problems must be resolved through dialogue.”

WAKE-UP CALL

Former President Alejandro Toledo, the early frontrunner in
the campaign but now running fourth in the vote, said Humala’s
lead was a sign that complacent elites and an inept civil service
had not done enough to fight social inequality.

“This is a wake-up call,” Toledo said. “The economic growth
model is not reaching the majority of Peruvians and they have
expressed their discontent at the ballot box today.”

Humala, 48, has surged in the race by recasting himself as a
moderate in the vein of former Brazilian President Luiz Inacio
Lula da Silva and distancing himself from his former political
mentor, Venezuelan President Hugo Chavez.

His rivals have sought to hurt his chances by saying he would
step up state control over the economy, rolling back reforms and
jeopardizing some $40 billion of foreign investment lined up for
the next decade in mining and energy exploration.

Such warnings have spooked better-off Peruvians who enjoyed
surging growth of up to 9 percent a year. They remain haunted by
the hyperinflation and guerrilla wars of the 1980s and 1990s.

Humala has taken to wearing ties, carrying rosary beads to
show he is a devout Roman Catholic and promising to be fiscally
prudent while respecting the independence of the central bank and
honoring the country’s many free-trade pacts.

Those tactics have persuaded some on Wall Street and in Peru’s
vast mining sector that he has matured and is no longer like his
brother and father, two well-known Peruvian radicals.

Moody’s ratings agency said Peru’s investment-grade credit
rating would not be threatened by an eventual Humala victory.

Still, Peru’s sol (PEN=PE: Quote, Profile, Research) currency and the country’s main
stock index (.IGRA: Quote, Profile, Research) have dipped over the past two weeks on worries
Humala could raise mining taxes, hike state subsidies or tighten
control of “strategic” sectors like electricity.

Market analysts said Toledo would have had the best chance of
beating Humala in the second-round.

“We probably will have a negative reaction by the Peruvian
market. Most surveys had Toledo as the candidate most likely to
beat Humala in the second round,” said Eduardo Suarez, senior
emerging market strategist at RBC Capital Markets in Toronto.
(Additional reporting by Patricia Velez, Caroline Stauffer,
Marco Aquino and Teresa Cespedes; Writing by Terry Wade and Helen
Popper; Editing by Anthony Boadle)
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Humala leads Peru vote, rivals battle for run-off spot