LONDON (Reuters) -Mexico's peso tumbled as much as 4.1% against the dollar on Monday and the local stock market fell over 2% after the ruling party scored a surprisingly strong election showing and looked poised for a super-majority that markets fear might bring constitutional change and diminish checks and balances.

Claudia Sheinbaum won a landslide victory in Sunday's presidential election, which was widely expected. But the scale of the gains for the ruling Morena party and its allies took markets by surprise, with some fearing this would pave the way for the group to pass constitutional reforms without opposition support.

The peso hit a fresh seven-week trough of 17.7207 to the dollar, a more than 4.1% drop, LSEG data showed. By 1354 GMT, the peso had trimmed some of its losses to trade at 17.56 to the dollar, down 3.2%.

"The question is whether the Morena party has done so well that it could command a super-majority and try to pursue market non-friendly policies of constitutional reform," said Chris Turner, global head of markets at ING.

The latest losses mean the currency has weakened over 3% since the start of the year, a sharp turnaround for the unit, which was, until recently, one of the few emerging markets currencies to have gained ground in 2024 against a strong dollar.

The benchmark stock market index fell 2.3% in early trading, while the MSCI index, priced in dollars, dropped 4.7%. The iShares MSCI Mexico ETF was down 5.7%.

Mexican sovereign bonds were little changed, with the spread measured by JPMorgan's EMBIGD index tightened by one basis point to 297 bps.

Sheinbaum, a climate scientist and former mayor of Mexico City, won the presidency with between 58.3% and 60.7% of the vote, according to a rapid sample count by the electoral authority, in what is set to be the highest vote percentage in Mexico's democratic history.

"Even if Morena fell a bit short of achieving a two thirds majority in the Senate, opposition parties could swing and favor Morena on issues that could significantly impact the business environment" said Alejo Czerwonko, chief investment officer for emerging markets Americas at UBS Financial Services.

In February, Lopez Obrador had proposed sweeping constitutional reforms, including measures to overhaul the judiciary, electoral law, pensions, and environmental regulations.

Throughout the course of his tenure, Lopez Obrador had doubled the minimum wage, reduced poverty and oversaw a strengthening peso and low levels of unemployment - successes that made him incredibly popular.

Sheinbaum has promised to expand the welfare policies that drove AMLO's popularity and her triumph, but this will be a tricky task while inheriting a hefty budget deficit and low economic growth.

JPMorgan noted the conciliatory tone of Sheinbaum's acceptance speech, which she directed to all Mexicans.

She also "sought to calm down markets by stressing that her administration will guarantee an autonomous central bank, keep the division between economic and political powers, abide by legality and preserve a disciplined fiscal stance," JPMorgan said in a client note.

President Lopez Obrador said in a morning press conference that finance minister Rogelio Ramirez de la O will remain in his post for some time to help facilitate the transition.