SANTOS Brazil (Reuters) - Brazilian presidential candidate Eduardo Campos was killed in a plane crash on Wednesday, throwing the October election and local financial markets into disarray.

A private jet carrying Campos and his entourage crashed in a residential area in bad weather as it prepared to land in the coastal city of Santos. The accident killed all seven people on board, the Sao Paulo state fire department said.

Campos, 49, was running on a business-friendly platform and was in third place in polls with the support of about 10 percent of voters. While he was not expected to win the Oct. 5 vote, he was widely seen as one of Brazil’s brightest young political stars and his death instantly changes the dynamics of the race.

Some analysts said that Campos’ death could make it harder for President Dilma Rousseff to win a second term, especially if his running mate Marina Silva runs in his place, as allowed by electoral law.

A renowned environmentalist and former presidential candidate, Silva is better known nationally than Campos and could eat into Rousseff’s support among leftist and younger voters. Silva’s religious beliefs also make her hugely popular among evangelical Christian voters, an increasingly important demographic in Brazil.

Silva’s popularity could get an additional boost from an outpouring of sympathy in the wake of Campos’ death.

But a significant surge for Silva could, some observers speculated, put her ahead of Rousseff’s closest challenger, Senator Aecio Neves, and even knock the pro-business centrist out of a second-round runoff.

In the hours after the crash, politicians from all sides expressed grief for a charismatic young former governor who even opponents privately whispered was likely to become president - probably not in 2014, but someday.

Rousseff, who is leading the race, announced she would suspend all campaigning for three days. “Brazil lost a young leader with an extremely promising future, a man who could reach the highest offices of the country,” she said, her voice cracking in a nationally televised address.

Neves, the candidate from the Brazilian Social Democracy Party running in second place, said he was “immensely saddened.”

Silva called Campos’ death a “tragedy” for all of Brazil as she broke into tears, but gave no indication of whether she would step in to run in his place.

Rousseff is ahead 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 runoff on Oct. 26.

Brazilian financial markets initially slumped on the news of Campos’ death and seesawed throughout the day as investors struggled to grasp what the impact would be on the election.

Slideshow ( 4 images )

The Bovespa stock index .BVSP ended 1.53 percent lower after falling as much as 2 percent, then rebounding and finally dropping again in late trade. Brazil's currency BRL=BRBY weakened 0.53 percent before bouncing back.

BUSINESS-FRIENDLY LEFTIST

Campos, the leader of the Brazilian Socialist Party and a former governor of the northeastern state of Pernambuco, was running as a market-friendly leftist and had strong support from many banks and industrial groups.

Slideshow ( 4 images )

His running mate Silva placed a strong third in the 2010 presidential election, but her pro-environment agenda means that many in Brazil’s powerful agribusiness sector distrust her.

The entry of Silva into the race could 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.

On Tuesday night, Campos was in Rio de Janeiro for an interview with Brazil’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.

Campos got his start in politics at the age of 21, when he helped with the gubernatorial campaign of his late grandfather, Miguel Arraes, an icon of the pro-democracy campaign against Brazil’s military dictatorship in the 1980s.

While still in his 20s, Campos was Arraes’ cabinet chief and then won a seat in the state legislature.

Campos was also a protege of popular former President Luiz Inacio Lula da Silva, Rousseff’s predecessor and political mentor. Campos served as Lula’s minister of science and technology before becoming the governor of Pernambuco in 2006.

Last year, Campos’ party left Rousseff’s ruling coalition, saying her government had abandoned the pragmatic policies that characterized Lula’s administration.

Shortly after that, Campos started preparing his own presidential run.

“Surely he would have had an important role in Brazil’s future. Brazil needs leaders like him, with the ability to understand the situation and not store up hatred or animosity. Eduardo was like that,” said Fernando Henrique Cardoso, another former president and a member of Neves’ party.

Brazil has a long tradition of candidates losing elections but coming back to win later, bolstered by higher name recognition. Luiz Inacio Lula da Silva won the presidency in 2002 after losing three previous races.

Campos is survived by his wife Renata de Andrade Lima Campos and five children, including a six-month old boy.