By Christine Murray and Diego Oré
MEXICO CITY (Reuters) - Andres Manuel Lopez Obrador decisively won Mexico's presidency on Sunday, exit polls showed, setting the stage for the most left-wing government in decades at a time of tense relations with the Trump administration.
Pledging to eradicate corruption and subdue drug cartels with a less confrontational approach, the 64-year-old former Mexico City mayor will carry high expectations into office even as his efforts to reduce inequality are watched closely by nervous investors.
A Lopez Obrador government could usher in greater scrutiny of foreign investment and a less accommodating approach to the United States, but the peso rose more than 1 percent after his rivals conceded within minutes of the end of voting.
Four exit polls showed Lopez Obrador with a lead of more than 20 percentage points over his competitors, and winning between 46.8 percent and 59 percent of the vote. An official "quick count" of results is expected at midnight EDT (0400 GMT).
"The people wanted a change," said Ricardo Anaya, a former head of the centre-right National Action Party (PAN) who was one of Lopez Obrador's challengers. Exit polls forecast Anaya was likely to finish second, ahead of ruling Institutional Revolutionary Party (PRI) candidate Jose Antonio Meade.
People streamed into Mexico City's vast main square, where a stage was set up to receive the victor, with a large screen bearing the words "Andres Manuel Lopez Obrador, president."
Lopez Obrador's nationalism, stubborn nature and put-downs of rivals have drawn comparisons to U.S. President Donald Trump.
In a posting on Twitter, Trump congratulated the leftist on his victory. "I look very much forward to working with him. There is much to be done that will benefit both the United States and Mexico!" Trump tweeted.
The first high-level contact between Lopez Obrador and the White House is likely to be a phone call on Monday. Earlier on Sunday, Trump raised the prospect of taxing cars imported from Mexico if there are tensions with the new government.
The United States, which has been at odds with Mexico and Canada over the renegotiation of the North American Free Trade Agreement (NAFTA), has launched a probe into whether to slap tariffs on imported autos. Results are expected within months.
How Lopez Obrador handles relations with Trump, who has also sparred with Mexico over the U.S. president's call for a wall on the U.S.-Mexican border, will help define the new administration which will take office on Dec. 1.
Once an agitator famously photographed in a blood-splattered shirt after being hit with a truncheon at a protest, Lopez Obrador has mellowed with age and picked a team to reassure investors that his plans will not roil the economy.
Still, markets are closely watching how well his MORENA party performs in the elections for the Congress, where a majority could allow him to chip away at recent economic reforms.
"We have witnessed today a very profound reshaping of the country's political map," Goldman Sachs economist Alberto Ramos said. "The balance of power at the federal and local levels has definitely shifted to the left, with unclear implications for the near-term policy direction."
Lopez Obrador's advisers say he will quickly seek to soothe markets. His first comments will be closely watched for signs of moderation or a hardening line on foreign investment in Mexico's oil sector.
The outgoing government changed the constitution to attract more capital to the industry, but Lopez Obrador, who hails from an impoverished part of Mexico where oil exploitation began, has vowed to review the policy.
Born in Tabasco state, Lopez Obrador first came to global attention as Mexico City mayor, a post he left to run for president in 2006. Narrowly losing, he cried fraud and launched street protests many thought would end his political career.
However, with stubborn self-belief, he began a long journey back to prominence, tirelessly visiting far-flung villages and towns neglected by mainstream politicians for decades.
His victory is a stinging rebuke to the PRI, which has governed Mexico for 77 of the past 89 years, and its conservative rival, the PAN.
While the PRI's big-tent approach to politics defies easy categories, Lopez Obrador has pitched himself as the most left-wing leader in Mexico since Lazaro Cardenas came to power in 1934, distributing land to peasant farmers and nationalizing foreign industry, including oil companies.
Like Cardenas, Lopez Obrador plans to help poor farmers, though he has stressed he will not expropriate private property.
Addressing accusations of authoritarianism, Lopez Obrador told tens of thousands of supporters last week there would be no dictatorship. He promises to respect the separation of powers, freedom of the press and central bank independence.
Mexico election: https://tmsnrt.rs/2Ng1Me7
Hammering home a message that he alone could end a "mafia of power" and root out corruption that marred outgoing President Enrique Pena Nieto's government, Lopez Obrador's star has risen amid the scandals and Mexico's descent into dizzying levels of violence, which at times draws comparisons with war zones.
"We want governments that aren't corrupt and that let the country move forward," said Salvador Benitez, 43, a coffee shop owner in Mexico City. "This country is screaming for change."
Since former President Felipe Calderon of the PAN sent the army to fight cartels in 2007, some 230,000 people have been killed. Lopez Obrador says he will try new approaches to end the bloodshed, including a vaguely defined amnesty for some who work for drug gangs.
In contrast to the high-rolling ways of many PRI grandees, Lopez Obrador says he will live in his own middle-class home, turn the official residence into an arts centre, sell the presidential plane and slash his salary.
He has been vague on policy details. Seeking to corral support from economic nationalists, leftist liberals and social conservatives, he has pledged to combat inequality, improve pay and welfare spending, and run a tight budget.
However, on the road to power, Lopez Obrador has brought onto his team people who many Mexicans associate with the same network of politicians and bosses he said he would finish off.
Such pragmatism, which included appointing a former cigarette baron as his chief of staff, is seen by some loyalists as a betrayal of his ideals, and his government will likely be subject to extensive scrutiny for signs of misconduct.
(Reporting by Christine Murray and Diego Oré; Additional reporting by Dave Graham, Noe Torres, Daina Beth Solomon; Writing by Frank Jack Daniel; Editing by Dave Graham, Jeffrey Benkoe and Paul Simao)