By Daren Butler and Ezgi Erkoyun
ISTANBUL (Reuters) -President Tayyip Erdogan on Tuesday called Turkish voters to support him in a May 28 election runoff to maintain stability in Turkey, as he seeks to extend his rule into a third decade.
Erdogan got 49.5% in Sunday's vote and fell just short of the majority needed to avoid a runoff in a vote seen as a referendum on his autocratic rule. His main challenger, Kemal Kilicdaroglu, the candidate of a six-party opposition alliance, received 45%.
Turkish financial assets weakened for a second day, especially government and corporate bonds and banking stocks, as investors bet that Erdogan, 69, would win another five-year term and continue his unorthodox economic policies.
In a parliamentary election also held on Sunday, People's Alliance, comprised of Erdogan's AK Party (AKP) and its nationalist and Islamist partners, won 322 of 600 seats in the new legislature, achieving a majority that enabled him to argue that voting for him will ensure stability.
Erdogan said that Turkey needs harmony between parliament and presidency for a functional governance.
"The strong presence of the People's Alliance in parliament also makes us stronger as the government. The harmony between the executive and the legislature would help development of our country," he said in an interview broadcast by CNN Turk.
A breakdown of the voting tallies showed the AKP came out on top even in 10 of the 11 provinces hit by February's devastating earthquakes in southeast Turkey, in which more than 50,000 people were killed and millions left homeless.
Analysts said this outcome showed Erdogan's promise to rebuild shattered cities had reassured voters in what were already mostly AKP strongholds.
For his part, Erdogan's challenger Kilicdaroglu sought to put a positive spin on the outcome.
"A message of change emerged from the ballot box. Those who want change in this country are now more than those that don't want it," Kilicdaroglu said, referring to Erdogan falling short of 50%, in a series of tweets addressed to "dear young people".
But many of his supporters, including first-time voter Asim, were gloomy about Kilicdaroglu's chances in the runoff vote.
"I have less hope now," said Asim, a 22-year-old student.
"I think there is a deadlock here. On one side there are (Turkish) nationalist voters and on the other side there are Kurdish voters," he said, referring to the broad coalition backing Kilicdaroglu, a mild-mannered former civil servant.
"Only a master politician can pull victory from this situation, and that person is not Kilicdaroglu, in my view."
Kilicdaroglu, 74, appealed to young voters with references to the cost-of-living crisis, which in Turkey has been much exacerbated by Erdogan's insistence on cutting interest rates, causing a sharp slide in the lira and soaring inflation.
"You don't have enough money for anything," he said. "Your joy of life was taken away... You won't get your youth back again. We have 12 days to get out of this dark tunnel..."
Young voters have said they want better education, an end to nepotism, and improvements in human rights. A survey by Konda Research last year showed about three quarters of first-time voters thought it would be bad for Turkey if Erdogan won this presidential election, against 59% among the wider population.
Kilicdaroglu, leader of the secularist CHP party, has vowed to revive democracy after years of state repression, return to orthodox economic policies, empower institutions that lost autonomy under Erdogan and rebuild frayed ties with the West.
Meanwhile, the Green Left - the third largest party in the new parliament after the AKP and the CHP - said it had filed objections to the results at "hundreds" of ballot boxes, alleging fraud.
The election is being closely followed in Washington, Europe and across the region, where Erdogan has asserted Turkish power. He has also strengthened ties to Russia, putting strain on Ankara's traditional alliance with the United States.
In Sunday's presidential vote, nationalist candidate Sinan Ogan came third with 5.2% support and there will be much focus now on how his supporters will vote on May 28.
In a potential boost to Erdogan, Ogan told Reuters in an interview on Monday he would only endorse Kilicdaroglu in the runoff if the latter ruled out any concessions to a pro-Kurdish party.
Opinion polls had shown Erdogan trailing Kilicdaroglu, but Sunday's outcome suggested he and his Islamist-rooted AKP were able to rally conservative voters despite Turkey's economic woes.
Kilicdaroglu and his alliance want to restore a parliamentary system of government and scrap the powerful executive presidency introduced by Erdogan.
The AKP came first in Sunday's parliamentary vote with 267 lawmakers, followed by Kilicdaroglu's CHP on 169 and the pro-Kurdish Green Left party on 61.
(Additional reporting by Karin Strohecker in London and Huseyin Hayatsever in AnkaraWriting by Daren Butler and Gareth Jones Editing by Alexandra Hudson and Alistair Bell)