Left-wing alliance to stop Le Pen’s far-right

France’s left-wing New Popular Front coalition unexpectedly halted the advance of the far right, winning the largest number of seats but falling short of an absolute majority in parliament in the second round of voting, initial data showed.

The New Popular Front — a coalition of five parties ranging from the far-left France Unbowed to the Socialists and Ecologists — could win between 180 and 215 seats in the latest round of elections, according to IFOP estimate for French television station TV 1. Ipsos predicts the faction will win between 172 and 192 seats.

According to IFOP, French President Emmanuel Macron’s Ensemble party and its allies are expected to win between 150 and 180 seats, while the far-right Rassemblement National – which won the first round of elections and is widely seen as likely to maintain its strong momentum in the second round – is third with 120-150 seats.

No party won the 289-seat absolute majority needed to govern on its own, suggesting markets could open on Monday with a hung parliament in Europe’s third-largest economy, if Sunday’s election result is confirmed.

Prime Minister Gabriel Attal announced his intention to resign on Sunday following the results. “Faithful to the traditions of the Republican Party and to my principles, tomorrow morning I will submit my resignation to the president of the Republic,” Attal said, according to a CNBC translation.

“I know that, given the results of tonight, many French people feel a certain uncertainty about the future, since no absolute majority has emerged. [in parliament]”Our country is going through an unprecedented political situation,” Attal added.

Ludovic Subran, chief economist at Allianz, told CNBC on Sunday that “France has rejected the far-right, [and] Now it is necessary to peel off… the left wing and build a center-left for tomorrow to reassure the markets.”

Preliminary voting last Sunday showed the RN would become the largest party in the French parliament but over the past week, the centre-right and left have joined forces to try to block its advance, withdrawing candidates in many constituencies where other candidates are better placed to defeat the far-right.

By giving voters a clearer choice and fewer candidates, opponents of the RN hoped that voters would choose the non-RN candidate. The move appeared to have worked, with anti-RN voters taking action. Turnout for the second ballot was 67.1 percent, the highest since 1997, according to polling firm Ipsos.

“The head of state must bow his head and admit this defeat. The prime minister must resign,” Jean-Luc Melenchon, leader of the France Unbowed party, said in a speech translated by CNBC. social media update after the early release of polling data. “Mr Macron must call on the NFP to run the country. They are ready to implement their whole agenda, nothing but their agenda.”

He added that the party had “tirelessly” fought Macron’s policies over the past seven years.

“We reject any association with the presidential camp,” Melenchon said, in a separate post translated by CNBC.

A period of bargaining and uncertainty is likely to unfold in France as political coalitions are formed with the aim of forming a government, but it remains unclear how far President Macron will be willing to cooperate with the left-wing coalition.

The country is in uncharted waters: President Macron shocked European politics by announcing the postponement of the election after his Renaissance party was trounced by the National Rally in June’s EU parliamentary elections. Political analysts said Macron’s move was an extreme gamble, with the president betting that the French people would be frightened and ultimately reject the prospect of a far-right government. The latest round of voting showed that voters ultimately rejected Macron.

Macron is now reviewing the latest election results and will wait for a full report on the parliamentary vote before deciding on his next steps, the French president’s office said on Sunday, Reuters reported.

Speaking after the release of the exit poll predictions, RN leader Jordan Bardella be censured that the “honorless alliance” between Macron and Melenchon now “pushes France into the arms of the far left,” according to a CNBC translation.

“The National Assembly is now, more than ever, the only option facing the single party, which expands, tonight, from [far-left politician] Philippe Poutou arrives [former French Prime Minister] Edouard Philippe,” Bardella added.

— CNBC’s Helen Eggleton contributed to this article.