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Brazil presidential candidate dies in plane crash

Crash site of the aircraft carrying the presidential candidate Eduardo Campos in Santos, Brazil, on August 13, 2014.
Ricardo Nogueira | AFP | Getty Images
Crash site of the aircraft carrying the presidential candidate Eduardo Campos in Santos, Brazil, on August 13, 2014.

Brazilian presidential candidate Eduardo Campos was killed in a plane crash on Wednesday, throwing the October election into disarray and causing big swings in local financial markets.

Campos' private jet crashed in bad weather as it prepared to land in the coastal city of Santos, just south of Sao Paulo, killing all seven people on board, the Sao Paulo state fire department said. Television images showed smoke billowing from the crash site in a residential area.

Campos, 49, was in third place in recent polls with the support of about 10 percent of voters. While he was not expected to win the Oct. 5 vote, he was perceived by some as the most market-friendly of the three main candidates and his death will set off an intense, if respectful, scramble for his supporters in a tightening election.

President Dilma Rousseff, who is leading the race, announced she would suspend all campaigning for three days in mourning. Senator Aecio Neves, the centrist candidate running in second place, said he was "immensely saddened."

Eduardo Campos, candidate of the Brazilian Socialist Party (PSB) for October's presidential election, speaks on August 6, 2014.
Evaristo Sa | AFP | Getty Images
Eduardo Campos, candidate of the Brazilian Socialist Party (PSB) for October's presidential election, speaks on August 6, 2014.

Rousseff is leading in polls with about 36 percent of voter support. Neves has enjoyed about 20 percent support and was widely expected to face Rousseff in a second-round runoff.

Campos, a former governor of the northeastern state of Pernambuco, was running as a business-friendly leftist and had strong support from many banks and industrial groups. His death could see Marina Silva, his running mate, become the Brazilian Socialist Party's candidate.

Silva was not aboard the plane that crashed. She placed a strong third in the 2010 presidential election and enjoys robust support from young voters and evangelical voters, but her pro-environment agenda means that many in Brazil's powerful agribusiness sector distrust her.

The entry of Silva into the race could actually increase the odds of Rousseff facing a runoff, Brown Brothers Harriman said in a note to clients.

"She is very well known and arguably has a closer electoral base to (Rousseff)," the bank said in the note.

Brazil's main stock index lost as much as 2 percent following initial reports that Campos was on the crashed plane, but later regained ground and was almost unchanged in early afternoon trade. The currency also fell sharply on news of Campos' death but later bounced back.

Brazilian markets have in recent months risen when polls show Rousseff's popularity slipping, or increased odds of her losing her quest for a second term. The left-leaning president has alienated many business leaders with her interventionist policies as Brazil's economy has been stagnant for most of the period since she took office in 2011.

On Tuesday night, Campos was in Rio de Janeiro for an interview with the country's most-watched nightly news program. Several pundits praised his performance as confident and authoritative, and said he might rise in polls as a result.

U.S.-traded stocks of Brazilian companies fell on Wednesday after the report.

An index of shares of Brazilian companies traded in U.S. exchanges fell 1.7 percent with Petrobras down as much as 5.9 percent before trading down 1.9 percent at $15.87.

The Ishares MSCI Brazil ETF dropped 1.1 percent to $48.27.

—By Reuters with CNBC