Reuters International

Peruvian presidential candidate Pedro Pablo Kuczynski waves to followers in Lima, Peru, June 5, 2016. REUTERS/Guadalupe Pardo

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By Mitra Taj and Caroline Stauffer

LIMA (Reuters) - Former Wall Street executive Pedro Pablo Kuczynski's lead over Keiko Fujimori, the daughter of an imprisoned former authoritarian leader, narrowed to just 0.36 percentage points late on Monday.

With 95 percent of votes processed in Peru's closest presidential election in at least 50 years, Kuczynski led Fujimori by fewer than 60,000 votes. Preliminary results on Sunday put more than a percentage point between them.

Votes from Peruvians living abroad were largely still to be tallied and could decide the outcome. One review of sample ballots suggested they were more likely to favour Kuczynski, a former prime minister and World Bank economist.

Fujimori had long been the favourite to win Sunday's election by a clear margin but Kuczynski caught up with her in final polls as Peruvians weighed the legacy of her father Alberto Fujimori, who was convicted of corruption and human rights abuse, and scandals involving her own close advisers.

Some Peruvians have fond memories of the elder Fujimori's decade-long rule, however, as he is credited with defeating violent Shining Path guerillas and building rural schools and hospitals.

Both candidates have promised policies that would be largely favourable to investors in the mineral-rich Andean nation.

Kuczynski, 77, appeared briefly on his balcony on Monday, dancing with his hands raised after kissing his American-born wife. Asked if he was concerned about the results, as the gap between the two candidates narrowed, Kuczynski shook his head.

"The ballots from abroad have not arrived! We'll talk tomorrow," he told journalists and fans who were gathered below.

Representing nearly 4 percent of the possible electorate, foreign-based voters mostly live in the United States where Kuczynski, a former investment banker, stumped for votes in April. The latest results showed 5 percent of votes abroad had been counted, compared with 98 percent in Peru.

DISPUTED BALLOTS

A review of sample ballots by GfK pollster on Sunday showed Kuczynski had a nearly 6-point lead over Fujimori among the diaspora.

Fujimori, 41, has not spoken in public since late Sunday night, when she told her orange-clad supporters to be patient after a quick count by two polling firms forecast a statistical tie with Kuczynski slightly ahead.

This could be Fujimori's second narrow loss in her quest for the presidency after outgoing President Ollanta Humala defeated her in 2011. But members of her party said they were still optimistic.

"As rural votes have come in, we're seeing the distance shortening," lawmaker and ally Pedro Spadaro said. "We're sure that with the share still missing that we'll be able to reverse the situation and of course come in first."

While international observers said there was no indication of fraud, the close vote raised the spectre of disputed ballots dragging out the decision.

Cucho said earlier on Monday, when about 90 percent of votes had been processed, that 1.5 percent were being disputed.

While disputes over ballots are common in Peru, where voting is mandatory and volunteer observers can lodge complaints, they have not played a significant role in recent presidential elections that ended with candidates conceding defeat before a full vote count was completed.

During his campaign, Kuczynski portrayed himself as an honest and experienced leader who would clean up corruption, ensure every town in Peru had piped water and revive economic growth that has slowed on weaker prices for mineral exports.

Fujimori has promised to take an iron-fist approach to crime, the top voter concern, while ramping up spending on scores of infrastructure projects from reservoirs to roads.

(Additional reporting by Teresa Cespedes, Marco Aquino and Ursula Scollo; Editing by Mary Milliken, Alistair Bell and Alison Williams)

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