Neves, a candidate for the Brazilian Social Democratic Party, gained 33.5 per cent of the first-round votes, meaning he will face incumbent Dilma Rousseff in a run-off on 26 October.

Current president Rousseff gained 41.5 per cent, a smaller lead than exit polls had suggested.

Environmentalist Marina Silva, the one-time favourite who took over after the death of Eduardo Campos as the Socialist Party candidate, came third with 21.3 per cent.

While Rousseff remains in the driving seat, investors are set to react positively to the possibility that Neves will be able to oust her later this month.

A rally in Brazilian equity markets earlier this summer, based on hopes of a Silva victory, has been knocked in recent weeks as Rousseff regained her lead. Pre-election volatility last week saw the Bovespa fall 5 per cent on Monday but end the week by rebounding 2 per cent.

Investors dislike her perceived interventionist approach, while voters are reportedly frustrated with poor public services and corrupution surrounding this year’s World Cup.