JAKARTA (REUTERS) - A small Indonesian political party has struck a deal with the main opposition party, clearing the way for its popular presidential candidate to run for the top job in July, a senior official of the smaller party said on Sunday.
In a Wednesday parliamentary election, the Indonesian Democratic Party-Struggle (PDI-P), whose presidential candidate is the popular governor of Jakarta, Joko "Jokowi" Widodo, fell short of securing the 25 percent of votes needed to nominate its candidate on its own for a July 9 presidential election.
The main opposition party's failure to secure a decisive victory in the legislative elections led to some concern in financial markets that Southeast Asia's biggest economy was in for a period of political horse-trading.
Both stocks and the rupiah currency lost ground after the vote.
But on Sunday, the small National Democrat (NasDem) party, which is led by media tycoon Surya Paloh, said it had struck a deal with the PDI-P, clearing the way for Mr Joko to run in July, when he is widely seen as likely to win.
"NasDem has a similar ideology to that of PDI-P and we have been communicating intensively for months," Willy Aditya, vice secretary general of NasDem, told Reuters by text message.
"We hope to be able to build a platform of restoration for Indonesia through our new government."
PDI-P officials did not respond to telephone calls seeking comment.
The pact is likely to ease investors' concern about prolonged political uncertainty.
The PDI-P secured 19 per cent of the vote on Wednesday, according to unofficial results, while NasDem got 6 per cent.
The PDI-P's unconvincing win was partly due to poor campaigning and a failure to get the message out to all voters that Jokowi will be its candidate for president, analysts said.
The deal with the party of Mr Paloh, the founder and owner of Indonesian news television network Metro TV and publisher of the Media Group, should help with the job of getting information out.
The PDI-P is likely to be still looking for political allies. Although the deal with NasDem clears the way for Mr Joko's nomination, if he becomes president he will need a broader coalition to get legislation through parliament.
President Susilo Bambang Yudhoyono and his ruling Democratic Party suffered during their second and final term after failing to get parliamentary backing for various policies.