| SAO PAULO
SAO PAULO Ruling party candidate Dilma Rousseff led Brazil's presidential election on Sunday, but she will almost certainly face a runoff after some voters were turned off at the last minute by a corruption scandal and her views on social issues.
Rousseff, a former Marxist guerrilla leader who vows to continue the pragmatic center-left policies that have made Brazil one of the world's fastest-growing emerging market economies, had 45.2 percent of valid votes with 83 percent of ballots counted.
She needed more than 50 percent to avoid a runoff on October 31 and so will likely face her nearest rival, opposition candidate and former Sao Paulo state governor Jose Serra, who garnered 33.4 percent of the votes.
A senior source inside Rousseff's ruling Workers' Party said there was now "no way" she could avoid a second round vote.
An unexpected late surge by a third candidate, the Green Party's Marina Silva, came largely at Rousseff's expense. Silva had 20.2 percent of valid votes.
Rousseff is favored to beat Serra in a runoff and become the first woman to lead Brazil, although a first-round victory would have given her a stronger mandate to push through reforms such as changes to Brazil's onerous tax laws.
Her campaign has been helped by red-hot economic growth and the support of President Luiz Inacio Lula da Silva, who is wildly popular and handpicked Rousseff to succeed him.
Yet recent allegations of a kickback scheme involving Lula's chief of staff, plus questions among evangelical Christians about Rousseff's positions on abortion and other social issues, appear to have instilled just enough doubt in voters' minds to cost her a first-round victory.
Valdeci Baiao da Silva, a security officer in Brasilia, said the good economic times had made him a Lula supporter -- but he voted for Serra on Sunday because Rousseff seemed unprepared and unpredictable.
"I think she might even disappoint (Lula)," he said.
At a church service in Brasilia on Sunday, Pastor Otaviano Miguel da Silva urged his followers not to vote for candidates from Rousseff's ruling Workers' Party because "it approves of homosexuality, lesbianism, and is in favor of abortion."
Brazil is overwhelmingly Catholic, but evangelicals are growing in number and pre-election polls showed them abandoning Rousseff in significant numbers as the vote grew closer.
Rousseff met with church leaders last week and affirmed her support for existing laws, but she may not have been able to overcome Internet videos showing previous statements in which she appeared to support the decriminalization of abortion.
Green Party candidate Silva, herself an evangelical, appeared to be the main beneficiary of the last-minute shift.
ROUSSEFF STILL SEEN WINNING RUNOFF
Serra, one of Brazil's most experienced politicians, should now have an extra four weeks to chip away at Rousseff's lead. Still, political analysts say a major scandal involving Rousseff directly would be virtually the only scenario under which she could lose a runoff.
Lula will spend the coming weeks touting his accomplishments -- including 20 million people lifted out of poverty since 2003 -- and telling voters that Rousseff, his former chief of staff, is the best candidate for the job.
Runoffs are common in Brazil -- Lula faced them in 2002 and 2006, and emerged with a strong mandate in both cases -- and Rousseff is expected to take victory.
"This is an electoral climate that favors the incumbent party," political analyst Luiz Piva said. "Brazilians are generally very happy with their government."
Investors have been happy too. Brazil's stock market, bonds and currency have all remained strong in the run-up to the vote -- a marked contrast to the panic that preceded the 2002 election of Lula, a former radical.
Under Lula's mix of social welfare policies and generally investor-friendly economic management, Brazil has witnessed the rapid growth of a middle class that is snapping up cars, houses and other goods in record numbers.
The country has also joined Russia, India and China in the "BRIC" group of emerging powers that are gaining in influence, especially as more developed economies have stagnated.
Rousseff, a career civil servant who had never run for elected office, has vowed to focus on improving Brazil's woeful infrastructure -- especially as the country prepares to host the World Cup in 2014 and the Olympics in 2016.
She has become more pragmatic over time since spending nearly three years in jail in the 1970s for her militancy against the dictatorship of that era. Some investors fear she could govern to the left of Lula, although Rousseff's advisers have told Reuters she is unlikely to lead a major expansion of the state apart from in some strategic areas such as the energy sector.
The probable extension of the campaign marks a new lease on life for Serra, an accomplished former health minister who ran a lackluster campaign until mustering just enough support in the final days to force the runoff.
Serra, 68, has vowed to run a centrist, pro-business government. Yet he also believes in a strong state presence in some sectors, and his administration would likely be broadly similar in practice to Rousseff's.
Sunday also saw voting for local and regional races throughout Brazil that will determine the makeup of Congress. Rousseff's 10-party coalition was expected to win a clear majority. The winner of the runoff for president will take office on January 1.
(Additional reporting by Ana Nicolaci da Costa in Brasilia, Editing by Todd Benson and Kieran Murray)