By Marco Aquino, Aida Pelaez-Fernandez and Leila Miller
LIMA, April 15 (Reuters) - Leftist Peruvian congressman Roberto Sanchez shifted into second place in a presidential vote tally heading down to the wire on Wednesday, rattling financial markets at the prospect of him facing Keiko Fujimori in the runoff.
With just over 91% of the ballots counted, Sanchez held a razor-thin lead over right-wing former Lima mayor Rafael Lopez Aliaga, at 12.1% and 11.9% respectively. Center-left candidate Jorge Nieto was in fourth place at 11.1%, data from electoral authority ONPE showed.
Fujimori, a conservative former congresswoman and the daughter of late former President Alberto Fujimori, remained comfortably in the lead, with 17% of the vote from Sunday's election.
She is set to advance to a runoff due on June 7, in her fourth bid for the presidency of the South American country.
Markets reacted on Wednesday, with Peru's sol currency weakening 1.4% against the U.S. dollar and the MSCI Peru stock index sinking 6.6%.
Market analysts said the market slump reflects fears that Sanchez could clinch the second place.
Sanchez, 57, a congressman running for the left-leaning Together for Peru party, has called for a new constitution to establish a "plurinational" state that would give a greater voice to Indigenous communities that have felt excluded from national decision-making.
He is an ally of former president Pedro Castillo, who was jailed on rebellion and conspiracy charges after a short-lived presidency that ended in a failed attempt to dissolve Congress in 2022.
From prison, Castillo has endorsed Sanchez, who in turn has called for Castillo's release, saying on X on Wednesday: "Let no constitutional president ever again be removed from office or arrested."
"Sanchez represents more risk for the market," said Alberto Arispe, who leads Kallpa SAB, a Peruvian brokerage.
THE MAIN CANDIDATES
There seemed to be no end on Wednesday to the political uncertainty that has stalked Peru, which has had eight presidents in the last decade.
As counting continues, allegations of fraud have spread. Lopez Aliaga and Sanchez both expressed concerns about the integrity of the process, and Lopez Aliaga shared a post that called for Fujimori to request that the proceedings be annulled.
European Union election observers said at a press conference on Tuesday that they had found no concrete evidence to support the allegations of fraud that have been circulating since Sunday.
Fujimori, 50, also reached the runoff in all three of her previous campaigns. She leads the Popular Force party, which anchors a right-wing bloc in Congress.
She has positioned herself as pro-U.S., pitching foreign investment, and her campaign has emphasized a law-and-order message, echoing the militarized security policies associated with the presidency of her father, who ruled from 1990 to 2000 before being jailed for human rights abuses.
Lopez Aliaga, 65, is an ultraconservative businessman from the Popular Renewal party and a former Citibank corporate banker. Nicknamed "Porky" after the cartoon character Porky Pig, he opposes abortion, same-sex marriage and what he calls "gender ideology."
(Reporting by Marco Aquino, Aida Pelaez-Fernandez and Leila Miller; editing by Philippa Fletcher, Hugh Lawson and Rosalba O'Brien)
