Portuguese president to meet party leaders Oct 20-21 on new government

The conservative president has to nominate the new prime minister after the centre-right ruling coalition obtained the most votes in the election, but lost its parliament majority.

The inconclusive election result prompted negotiations on forming a government among the second-placed centre-left Socialists and two hard-left parties, who between them have a majority in parliament.

Talks between Prime Minister Pedro Passos Coelho's grouping and the Socialists broke off on Tuesday and Passos Coelho, who is now premier in a caretaker capacity, said he expected the president to name him as prime minister.

The possibility of a leftist administration or a prolonged power vacuum has worried investors in a country still recovering from a debt crisis. Portugal's benchmark 10-year bond yields rose on Thursday to above 2.5 percent for the first time since late September.

Cavaco Silva summoned the parties for consultations after the final election results came in on Wednesday night, allocating the last four seats in parliament - three to the coalition and one to the Socialists.

The coalition now has 107 seats in the 230-seat house, while the Socialists have 86, followed by the Left Bloc with 19 and Communists with 17.

(Reporting by Andrei Khalip; editing by Axel Bugge and Andrew Roche)