* Policy uncertainty looms after death of former president
* Death points to a re-election bid by current leader
* Critics saw Kirchner as divisive figure, markets rally (Adds analyst quote, color)
By Magdalena Morales
BUENOS AIRES, Oct 28 (Reuters) - Tens of thousands of Argentines paid tribute on Thursday to former President Nestor Kirchner, whose death rallied markets but robbed his wife and successor President Cristina Fernandez of her closest adviser.
Kirchner, 60, was Argentina’s most powerful politician and a leading contender for next year’s presidential election. His sudden death ended the Kirchners’ apparent plan to continue alternating in power, but she could run again.
Argentine stock and bond prices rose a day after Kirchner died of a heart attack at the couple’s weekend retreat in Patagonia, boosted by confidence among investors who disliked his unorthodox economic policies. [ID:nN28292423]
Fernandez, dressed in black, was joined by South American presidents, her two children and local celebrities, including former soccer star Diego Maradona, at a wake in the presidential palace.
Wearing dark sunglasses, her face etched with grief, the president patted her heart with her right hand as she smiled sadly and nodded toward friends, political allies, celebrities and foreign presidents who filed past her husband’s coffin.
“Strength, Cristina, strength,” some called out.
Outside in the square facing the famous pink palace, crowds waved the national flag and carried banners bearing messages of support. They stood about a dozen deep around the presidential palace, the ground beneath them strewn with flowers.
“He was the best president we’ve ever had. He got on well with the man in the street,” said housewife Dalia Mendoza, 45. Others compared him to former strongman Gen. Juan Peron, whose figure still looms large in Argentine politics as the namesake of the Peronist party that Kirchner led.
Full coverage of Kirchner’s death: [nARGENTINA]
Political risks in Argentina: [ID:nRISKAR]
Breakingviews column: [ID:nN27269977]
Timeline graphic link.reuters.com/pys52q
Many in Argentina credit center-leftist Kirchner with leading the country out of a 2001-2002 economic crisis. His criticism of the free-market, big business and the International Monetary Fund struck a chord with crisis-weary Argentines.
But foreign investors disliked his interventionist economic policies and combative style, and never forgave him for the tough 2005 renegotiation of some $100 billion in defaulted bonds, which stuck creditors with a steep discount.
“The disappearance from the political scene of perhaps the most iconic and polarizing political figure of the last decade is a watershed event with profound political and potentially also economic implications,” Goldman Sachs senior analyst Alberto Ramos said in a note to clients.
The death threw Argentina into “significant uncertainty” as politicians line up to try to fill “the vacuum left by a political heavyweight with no heir apparent,” Ramos said.
Kirchner was still popular when he decided to step aside and let his wife, an influential politician in her own right, run for president in 2007.
The husband-wife team had long taken turns in the limelight and Fernandez was better-known for years as an Argentine senator than her husband, who was a provincial governor in southern Argentina.
Kirchner’s departure shakes up Argentina’s fractious political scene as attention turns to the October 2011 vote, and some analysts think Fernandez could now adopt a more conciliatory approach in a bid to shore up her support.
Fernandez’s approval ratings hover at around 35 percent, too low to suggest she could win a first-round victory in the 2011 vote, though slightly above her late husband’s ratings in recent polls.
The loss of her main broker may shift the balance of power in the government and its alliances with the trade unions.
“The boss has gone, we need to see it in those terms,” Argentine political analyst Jorge Giacobbe said. “The battle to influence her, to assume Nestor’s role, has already started ... what direction she takes depends on who manages to do that.”
But Fernandez, who has maintained his policies and will likely keep the same circle of advisers, may get a popularity boost as voters recall the boom years of her husband’s presidency when South America’s No. 2 economy rebounded.
Argentina, a leading agricultural exporter, has benefited from a boom in commodities prices since its economic debacle nine years ago that plunged millions of Argentines into poverty and prompted a massive default and sharp devaluation.
But critics of the presidential couple say they have failed to put Argentina on a path toward sustainable growth, tackle high inflation or build consensus with key economic sectors such as the farmers with whom Kirchner repeatedly clashed. (Additional reporting by Helen Popper, Juliana Castilla and Luis Andres Henao; Writing by Terry Wade and Hugh Bronstein)