M. Continuo

Polish opposition cheers presidential vote win, markets uneasy

By Pawel Sobczak and Jakub Iglewski

WARSAW (Reuters) - Poland's main opposition party celebrated its first national election victory in a decade on Monday, after its candidate for the presidency unexpectedly defeated incumbent Bronislaw Komorowski in a result that unnerved financial markets.

Andrzej Duda won Sunday's vote by 52 percent to 48 percent, according to an exit poll. His Law and Justice party is close to the Catholic church, socially conservative and considered less business-friendly than the governing Civic Platform party.

Reacting to the result, Polish assets fell across the board.

The share prices of Poland's leading banks - PKO, Pekao, and BZ WBK - fell by up to 4.0 percent on Monday, reflecting in part plans outlined by Duda to convert Swiss-franc denominated mortgages into zloty.

Polish government bond yields rose along the curve.

"There is a risk linked to uncertain election results in autumn, and there is also a risk of fiscal easing. These two risks are being priced-in by investors today," said Andrzej Bowtruczuk, a bond dealer at mBank in Warsaw.

Parliamentary elections are due in late October, and the defeat for Komorowski, an ally of Prime Minister Ewa Kopacz and a former Civic Platform lawmaker, will weight on the party's chance of re-election.

Latest opinion polls give Law and Justice alliance a marginal lead over Civic Platform, and Law and Justice parliamentary caucus head Mariusz Blaszczak said on public radio he now expected party leader Jaroslaw Kaczynski to be the country's next prime minister.

Sunday's vote also reflected a desire among voters for new faces, and a sense that Poland's new-found prosperity has not been being shared out equally.

The zloty currency was down 0.7 percent against the franc and 0.3 percent against the euro on Monday, recouping part of the losses it sustained in after-hours trading on Sunday.

Komorowski conceded defeat late on Sunday. Official results of the election have yet to be released.

Duda will be sworn on August 6.

(Additional reporting by Pawel Florkiewicz, Adrian Krajewski in WARSAW; Writing by Christian Lowe and Marcin Goclowski; Editing by John Stonestreet)

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