Mexico conservative creeps toward slim victory

Calderon is more in line with US political views than his rival Obrador. Picture / Reuters

MEXICO CITY - Mexico's conservative presidential candidate Felipe Calderon declared victory overnight in a bitterly contested election and official returns appeared to show his leftist rival could no longer catch him.

Calderon had a lead of almost 400,000 votes over Andres Manuel Lopez Obrador with returns in from almost 98 per cent of polling stations and a senior election official said it was unlikely to change, with a recount ordered for later this week.

A Calderon victory would ensure Mexico sticks to the free-market policies of outgoing President Vicente Fox and hold steady as a US ally, bucking a trend of Latin American nations who have turned to the left and away from Washington in recent years.

"There is an irreversible result and it is in my favor," a confident Calderon of the ruling National Action Party said in a television interview. "The result gives me a very clear victory that cannot be reversed."

Arturo Sanchez, one of the nine board members of Mexico's Federal Electoral Institute, or IFE, said he expected a recount to make no difference to the result.

"What is going to happen with these results? The truth is they will be the same," said.

Lopez Obrador said on Sunday night local time that won the election by 500,000 votes and would insist that his victory be recognised in an official recount but he appeared more open to a possible defeat on Monday.

"If in the count we conduct, it turns out the final result does not favour us, I am going to abide by the result," he said. However, he added, "We are going to defend the will of the people if it favors us."

The official returns and Lopez Obrador's softer tone reduced the risk of a major political crisis of a contested election, and Mexico's financial markets jumped on a wave of investor optimism.

Critics accused Lopez Obrador of spouting out rash comments to mobilise militant supporters in the same manner that Venezuelan President Hugo Chavez fires up anti-US sentiment to strengthen his grip on power.

Legislative election results showed Calderon's party made major gains and would be the largest single party in the next Congress, although it fell short of a majority.

The stock market jumped 4.2 per cent in afternoon trade and Mexico's peso currency rose about 1.8 per cent.

Mexico's top election official said late on Sunday local time the race was too close to declare a winner and a recount was needed, but Calderon insisted that was no longer necessary.

With returns in from 97.7 per cent of polling stations, the conservative had 36.4 per cent support, 1 percentage point ahead of his rival. Lopez Obrador would have to see a dramatic swing in the remaining polling stations to catch up.

The IFE's recount, however, means it could be days before a final vote count is in, and a Lopez Obrador challenge could drag on for several weeks.

Some fear that delay and a combative Lopez Obrador could push Mexico toward political deadlock and lead to street protests and volatility in financial markets.

- REUTERS