Stocks tumble as Ollanta Humala becomes Peru's president

Peru’s stock market fell a record 12.5 per cent Monday as it became clear that left-wing nationalist Ollanta Humala had won the presidential run-off this weekend. Outgoing President Alan Garcia congratulated the ex-lieutenant-colonel and his opponent, Keiko Fujimori, conceded defeat.

Reuters

With 90 per cent of the vote counted, Humala increased his lead to 51.37 per cent against Fujimori’s 48.63 per cent.

That prompted a stockmarket slump, despite a mid-session halt to trading, and a spike in international silver prices, which rose 2.1 per cent in London.

Peru is a key world supplier of precious metals and has enjoyed a decade of economic growth, which hit 8.7 per cent in 2010.

Humala has promised to share out the wealth provided by gold, silver and copper to tackle a level of inequality which is one of the greatest in the world. His programme promised nationalisation of “strategic economic sectors”, an unpopular proposal with the business elite.

His victory is the first time the left has come to power since the 1968-1975 “military revolutionary government” of President Juan Velasco Alvaredo.

Venezuelan President Hugo Chavez, from whom Humala distanced himself during the election campaign, hailed the result as part of “a full dawn of another era”.

Brazilian President Dilma Rousseff phoned the new president to wish him “a lot of luck” and ivite him to visit Brazil.

The US’s top diplomat for Latin America, Arturo Valenzuela, who is on a visit to El Salvador, said Washington is “very willing” to work with Humala.