By Sergio Goncalves and Catarina Demony
LISBON (Reuters) -Portugal's centre-right Democratic Alliance was poised to finish first in Sunday's parliamentary election, according to the early tally, but short of an outright majority, suggesting tough negotiations ahead with the far-right that made huge gains.
The populist, far-right Chega party came third with over 19% of the vote, almost tripling its result in the last election in early 2022, when it won 7.2%.
The Democratic Alliance (AD) garnered around 31.5% of votes with over 70% of ballots counted, while the incumbent Socialist Party (PS) had earned just under 29%.
The provisional results were in line with exit polls published after polling stations closed at 8 p.m. (2000 GMT).
"It's the end of the two-party system," Chega leader Andre Ventura told reporters, referring to the PS and the Social Democratic Party (PSD), which leads the newly-created AD. The two have alternated in power since the end of a fascist dictatorship five decades ago.
Sunday's vote clearly shows the Portuguese want a coalition government between the AD and Chega, Ventura said.
However, the AD has so far ruled out any deal with Chega, which could make for an unstable government.
Turnout was over 63% in the early tally, up sharply from the 51.5% recorded in the 2022 election.
Sunday's ballot was triggered by Socialist Prime Minister Antonio Costa's resignation amid a graft investigation four months ago.
Issues dominating the campaign in western Europe's poorest country include a crippling housing crisis, low wages, sagging healthcare, and corruption, seen by many as endemic to the mainstream parties.
(Reporting by Sergio Goncalves, Catarina Demony and David LatonaEditing by Andrei Khalip, Frances Kerry, Christina Fincher and Giles Elgood)
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