Brazilian presidential candidates Geraldo Alckmin (left) and President Luiz Inacio Lula da Silva smile at supporters in this combination of separate photos taken after voting in general elections in Sao Paulo last Sunday.. Official results from the election confirmed that Lula and Alckmin will go to a second round run-off vote on October 29 as neither of the candidates won an absolute majority in the first round. - Reuters

SAO PAULO, Brazil (Reuters):

Brazilian President Luiz Inacio Lula da Silva faces a month of high-stakes campaigning against an inspired challenger who will try to hammer on corruption scandals to unseat the former metalworker in a run-off vote.

Lula, Brazil's first working-class president, failed to get over 50 per cent of the votes needed to clinch outright victory in Sunday's presidential election, setting up a showdown with opposition challenger Geraldo Alckmin on October 29.

Another month of campaigning will give the opposition time to rally support and potentially dig up more evidence of shady campaign tactics that have hurt the ruling Workers' Party.

Candidates are expected go on the attack. Alckmin, a former governor of Sao Paulo state, trailed Lula by only seven percentage points in Sunday's vote. He will seek support from some of the other five opposition candidates who did not reach the final.

"The second round is another election," said Fernanda Machiaveli, a political analyst at Tendencias, a Sao Paulo consulting firm. "After this turnaround, Lula is no longer the clear favourite."

Divisive campaigning

Others predicted divisive campaigning that could limit the next president's ability to build consensus in Congress and pass crucial economic reforms.

"This will hurt the country," said Fernando Abrucio, a political scientist at the Getulio Vargas business school.

Local financial markets rallied on hopes that Alckmin, who investors think is even more market-friendly than Lula, could eke out a win in the run-off.

Alckmin, who campaigned as a squeaky-clean alternative to the scandal-plagued Lula, was ebullient.