Turkish President Tayyip Erdogan's hopes of assuming greater power suffered a major setback on Sunday when the ruling AK Party he founded failed to win an outright majority in a parliamentary election for the first time.
With 98 percent of ballots counted, the AKP took 40.8 per cent of the vote, according to local media reports, down from 49.8 per cent at the last parliamentary election in 2011.
"Everyone should see that the AKP is the winner and leader of these elections," Ahmet Davutoglu, leader of the AKP, said.
"No one should try to build a victory from an election they lost," he told thousands of supporters.
The uncertainty sent the lira currency to a record low against the dollar in thin out-of-hours dealing as investors positioned themselves for what was likely to be a turbulent start of trade on Monday.
But for jubilant Kurds, who flooded the streets of the south-eastern city of Diyarbakir setting off fireworks and waving flags, there was plenty to celebrate. The pro-Kurdish Peoples' Democratic Party crossed a 10 per cent threshold to enter parliament for the first time.
With initial results putting it on around 13 percent, HDP co-leader Selahattin Demirtas ruled out a coalition with the AKP and said the election outcome had put an end to talk of the stronger presidential powers championed by Erdogan.
"The discussion of an executive presidency and dictatorship have come to an end in Turkey," he told a news conference in Istanbul, describing the outcome as a victory "for those who want a pluralist and civil new constitution".
The AKP's failure to win an overall majority marks an end to more than a decade of stable single-party rule and is a setback for both Erdogan and Davutoglu.
