Polls shows Rousseff gaining momentum as Brazil election nears

President Dilma Rousseff is gaining momentum but remains locked in a dead heat with challenger Aecio Neves ahead of Sunday's runoff to Brazil's presidential election, two surveys showed on Monday.

Centrist candidate Neves lost a slight but statistically insignificant lead over leftist Rousseff for the first time since the first round of elections on Oct. 5, according to the survey by Datafolha polling firm.

Since then, the presidential race has turned increasingly ugly as the candidates scramble for undecided voters. They have swapped accusations of corruption and economic mismanagement in heated televised debates over the past few days in what is shaping up to be Brazil's tightest election in decades.

The Datafolha poll showed the leftist incumbent with 46 percent of voter support, up 3 percentage points from the previous poll released on Oct. 15. Support for market favorite Neves dropped 2 percentage points to 43 percent.

A survey by polling firm MDA released earlier on Monday showed Rousseff with 45.5 percent of voter support versus 44.5 percent for Neves.

The difference between the two remains within the margin of error of both polls.

Excluding undecided voters, spoiled and blank survey responses, the Datafolha poll showed Rousseff had 52 percent against 48 percent for Neves, a senator and former state governor.

Brazil's currency and stock markets extended losses earlier on Monday after the MDA poll showed Neves of the Brazilian Social Democracy Party lost momentum.

Brazilian markets have been extremely volatile throughout the campaign, surging with each poll favoring Neves and slumping with surveys that show Rousseff gaining ground. After four years of sluggish growth and heavy-handed economic policies under Rousseff, investors are eager for a new government.

REJECTION RATE

Behind the slide in support for Neves could be his climbing rejection rate following a flurry of negative television campaigning by the Rousseff camp. Forty percent of interviewees said they would never vote for Neves, up from 38 percent in the past poll, surpassing for the first time the rejection rate of Rousseff in the race, Datafolha said.

The percentage of undecided voters remained unchanged at 6 percent, the Datafolha poll showed, meaning the candidates have not been able to persuade those voters in the final week of the campaign. It also shows that a corruption scandal rocking state-run oil company Petrobras has so far not hurt Rousseff's popularity.

Rousseff's approval rating climbed from 40 percent to 42 percent, its highest since June of 2013, Datafolha said.

Still, many analysts have been taking opinion polls with a grain of salt since they failed to accurately gauge the extent of Neves' surge in voter support on the eve of the first round.

Many investors blame Rousseff's policies for tipping Latin America's largest economy into recession and damaging state-run companies such as oil producer Petrobras and lender Banco do Brasil.

While Neves promises to switch to a more business-friendly model to boost economic growth, Rousseff pledges to build on policies that have lifted millions from poverty since her predecessor and mentor Luiz Inacio Lula da Silva first took office in 2003.

Rousseff won the first-round vote with 41.6 percent versus 33.6 percent for Neves, a difference of 8 million votes. Neves was endorsed a week ago by Marina Silva, a popular environmentalist who placed third with 22 million votes.

Datafolha interviewed 4,389 voters on Monday in a poll with a margin of error of 2 percentage points in either direction. The survey was commissioned by the Globo media group and the Folha de S.Paulo newspaper.

MDA interviewed 2,002 voters over the weekend in a poll commissioned by the transport lobby CNT. The poll's margin of error is 2.2 percentage points.