EMERGING MARKETS-Election results lift Thai markets, weigh on Turkish lira

May 15 (Reuters) - Thailand's currency and stock markets got a hesitant boost on Monday after elections handed pro-democracy parties a spectacular win, while Turkey seemed destined for protracted uncertainty after polls there appeared set for a runoff. The Thai baht was poised for its biggest rally in more than five weeks after Sunday's election placed the liberal Move Forward party and the populist Pheu Thai Party far out in front with most votes counted, but it was not certain either will form the next government. Opposition parties will need to strike deals and muster support from multiple camps in order to rule, including members of a junta-appointed Senate that has sided with military parties and gets to vote on who becomes prime minister and form the next administration. The baht rose as far as 33.68 per dollar in early onshore deals, compared with Friday's 33.99 close. Thai stocks climbed 0.6% at the open, but were soon trading slightly weaker. Vishnu Varathan, head of economics and strategy at Mizuho Bank, said the absence of a big majority for the Move Forward/Pheu Thai coalition (MF-PT), which may challenge the ability to pass bills, was perversely a positive for political stability. "...this results in a more stable, even if uncomfortable, political equilibrium between the pro-military/monarch faction and the 'pro-democracy' faction led by the MF-PT coalition," he said. Meanwhile, Turkey's lira slipped to a fresh two-month low after Sunday's presidential and parliamentary elections showed the race for presidency might head for a runoff. A potential second round is scheduled for May 28. The currency weakened to 19.70 to the dollar before retracing some of its losses to 19.66, on track for its worst session since early November and not far off the 19.80 level it hit in early March following deadly earthquakes in February. Parties of both incumbent Tayyip Erdogan and opposition rival Kemal Kilicdaroglu were claiming the lead but sources in both camps admitted they may not clear the 50% threshold to win outright. The lira, which is prone to sharp swings before regular trading hours, has weakened 5% since the start of the year. Turkish commercial lenders pushed up the cost of buying dollars on the interbank market after the central bank asked them to minimise foreign currency sales to companies ahead of the election, Bloomberg News reported, quoting unnamed sources. The currency has lost almost 95% of its value over the last decade and a half as sugar-rush economic policies have led to spectacular boom and bust cycles and rampant bouts of inflation and currency market turmoil. John Plassard, investment specialist at Mirabaud Group, said Turkish markets should remain highly volatile, regardless of who wins the elections. The economic policies that have undermined the lira will continue if Erdogan remains in power, he said. "Investors are concerned about the contagion risks to which some European banks are exposed by holding Turkish debt in foreign and local currency," Plassard wrote. "A change of government could put an end to central bank "liraization" policies and put pressure on the lira before the eventual tightening of financial conditions and the new economic framework take effect." Currency Latest bid Previous Pct Move day Japan yen 135.970 135.71 -0.19 Sing dlr 1.339 1.3383 -0.01 Taiwan dlr 30.801 30.758 -0.14 Korean won 1338.700 1334.5 -0.31 Baht 33.835 33.98 +0.43 Peso 55.955 55.854 -0.18 Rupiah 14810 14745 -0.44 Rupee 82.163 82.1625 +0.00 Ringgit 4.497 4.477 -0.44 Yuan 6.963 6.9585 -0.07 Change so far in 2023 Currency Latest bid End 2022 Pct Move Japan yen 135.970 131.110 -3.57 Sing dlr 1.339 1.340 +0.10 Taiwan dlr 30.801 30.708 -0.30 Korean won 1338.700 1264.500 -5.54 Baht 33.835 34.585 +2.22 Peso 55.955 55.670 -0.51 Rupiah 14810 15565 +5.10 Rupee 82.163 82.720 +0.68 Ringgit 4.497 4.400 -2.16 Yuan 6.963 6.900 -0.91 (Reporting by Vidya Ranganathan; Editing by Muralikumar Anantharaman)