By Anthony Boadle
BRASILIA (Reuters) - President Dilma Rousseff has lost ground among voters on worries about Brazil's faltering economy ahead of the Oct. 5 election, which will likely go to a tighter second-round vote, according to a poll published on Friday.
Rousseff is still the favourite to win re-election, but support for the left-leaning president has dropped to 34 percent, from 37 percent in a poll last month, and 10 percentage points since February, polling firm Datafolha said.
The poll helped propel Brazil's benchmark Bovespa stock index to its biggest gain in over a month, of over 2.6 percent, as shares of state-run firms rallied. Investors in those companies, which include oil producer Petroleo Brasileiro SA, known as Petrobras, hope a new administration will enact policies more favourable to business interests.
Rousseff still has a large - though shrinking - lead against her closest rival, Aécio Neves of the centrist Brazilian Social Democracy Party. In the latest Datafolha poll, Neves slipped one percentage point to 19 percent.
Behind him was Eduardo Campos, the candidate of the Brazilian Socialist Party, whose share of voting preferences fell to 7 percent in the latest poll from 11 percent in May.
If Rousseff fails to win 50 percent plus one of the valid votes cast on Oct. 5, the election will go to a run-off which could produce an upset. Her lead over Neves in a second-round vote has shrunk to 8 percentage points from 11 points in May.
Pessimism about the economy and worsening expectations regarding inflation and employment have hurt the approval rating of Rousseff's government, the poll showed.
Her negative numbers have grown, with 35 percent of voters saying they would never vote for Rousseff (up from 31 percent a month ago), while Neves' negatives have come down.
Anti-World Cup protests expected during the football tournament that kicks off next week in Brazil could further dent Rousseff's popularity and complicate a re-election bid.
The once-booming Brazilian economy is in its fourth year of slow growth and barely grew in the first quarter as investment plunged, reflecting a broad malaise that has stirred recent labour unrest and street protests.
For the first time, Brazilians who fear Brazil's economic situation will worsen (36 percent compared to 28 percent in May) outnumber those who believe it will continue the same (32 percent compared to 41 percent).
High prices are the main concern: 64 percent of those polled think inflation will get worse, up from 58 percent in May.
Annual inflation sped up to 6.37 percent in May, close to breaching the government target ceiling, according to official data released on Friday. Forty-eight percent of voters think unemployment will rise, compared with 42 percent last month.
Datafolha surveyed 4,337 people June 3-5. The poll has a margin of error of plus or minus 2 percentage points.
(Reporting by Anthony Boadle; Editing by Bernadette Baum, Sofina Mirza-Reid and W Simon)
