Turkey on Monday entered a new period of political and financial turbulence after President Recep Tayyip Erdogan’s ruling party lost its absolute majority in parliament for the first time since coming to power in 2002.

The uncertainty swiftly rattled financial markets with the stock market tumbling in morning trade and the Turkish lira plummeting in value against the dollar.

The Justice and Development Party (AKP) has dominated Turkish politics for the last 13 years but came well short of a majority in seats in Sunday’s legislative elections due to a breakthrough showing by the the pro-Kurdish People’s Democratic Party (HDP).

A coalition, a minority government and early elections are all now possibilities, in a situation unprecedented since the Islamic-rooted AKP swept to power.

“A new era,” said the headline in the Milliyet daily. “The collapse,” added the strongly anti-Erdogan Sozcu. “Voters showed Tayyip the red card.”

The pro-government Yeni Safak said early elections were “on the horizon”, with “weak” possibilities of a coalition.

Official results based on 99.99 percent of votes counted put the AKP on 41 percent, followed by the Republican People’s Party (CHP) on 25 percent, the Nationalist Movement Party (MHP) on 16.5 percent and the HDP in fourth place with 13 percent.

Turnout stood at 86.5 percent.

The result marked a major drop in support for the AKP  — which in the last polls in 2011 won almost 50 percent of the vote — against the background of a weakening economy.

According to official projections, the AKP will have 258 seats in the 550-seat parliament, the CHP 132, and the MHP and HDP 80 apiece.

– ‘Early polls unlikely’ –

The results wrecked the ambition of Erdogan — prime minister from 2003 to 2014 and now president — of agreeing a new constitution to switch Turkey from a parliamentary to a presidential system.

Such a change would have required a two-thirds majority in parliament. Just months before the election, Erdogan had been targeting 400 seats for the AKP.

Erdogan has yet to react to the vote and his official schedule on Monday showed no planned public appearance.

Prime Minister Ahmet Davutoglu, himself under immense pressure after the results, summoned his cabinet to a meeting in Ankara.

Arriving at the meeting, Deputy Prime Minister Numan Kurtulmus played down the chance of early elections, saying it was the “most distant possibility”.

Analysts have seen the nationalist MHP as the most likely coalition partner for the AKP in the new parliament.

However while not firmly closing the door on the option, the MHP’s leader Devlet Bahceli was hardly effusive, saying the results represented the “beginning of the end for the AKP”.

Another Deputy Prime Minister, Bulent Arinc, suggested that the MHP, CHP and HDP should try and form a coalition between themselves.

With investors nervous, the BIST 100 index on the Istanbul stock exchange was down 5.67 percent in morning trade while the Turkish lira lost 4.0 percent in value against the dollar to trade at 2.76 lira to the dollar.

“The associated political uncertainty only adds to an ugly mix of existing problems for Turkey,” said William Jackson at Capital Economics in London, citing high inflation, the current account deficit, and a rapid increase in private sector debt.

Turkey’s central bank acted swiftly in an intervention to give some support to the lira, saying it was pruning its short term foreign exchange deposit rates, effective from Tuesday.

– ‘Erdogan the loser’ –

The result was a triumph for the HDP, which in the campaign had sought to present itself as a genuinely Turkish party and reach out to voters beyond its mainly Kurdish support base to secular Turks, women and gays.

It was also a personal victory for the party’s charismatic leader Selahattin Demirtas, dubbed the “Kurdish Obama” by some for his silky rhetorical skills.

“We, as the oppressed people of Turkey who want justice, peace and freedom, have achieved a tremendous victory today,” Demirtas said, vowing to form a “strong and honest opposition”.

HDP MPs had sat in the previous parliament but they were elected as independents and not from a party list.

“There is just one loser in the election — Recep Tayyip Erdogan,” pro-opposition commentator Hasan Cemal wrote in an editorial for the T24 website. “And the winner is the HDP.”

The legislative election took place under the shadow of violence, after two people were killed and dozens more wounded in an attack on an HDP rally in Diyarbakir on Friday.