New Zealand still deadlocked after postal, overseas votes

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The conservative National Party finished with 56 seats, down from the 58 it held on election night while the centre-left Labour Party and the Green Party picked up a seat each to give them 46 and eight.

The final tally, which included overseas voters and those who voted outside their home constituencies, showed National lost some ground to the Labour-Green bloc, even though it still held the largest number of seats in parliament.

He said he was looking forward to negotiating with NZ First leader Winston Peters and his party.

"Today's final election count has strengthened the mandate for change", she said after the final tally was released.

Peters held short meetings with Labour and National this week but has repeatedly said the real negotiations would not take place before all the votes had been counted.

"This reinforces the mandate for negotiations to form a stable, durable and progressive Labour-led government, a government I would be proud to lead".

The majority of people voted for a change to the status quo.

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New Zealand Prime Minister Bill English remains confident of forming government - despite the loss of the two seats.

Greens leader James Shaw said his party wanted to be at the heart of a three-way coalition and he had a "polite and cordial relationship" with Peters.

"I think on Monday the market is going to be a little bit subdued because basically nothing has changed", said Stuart Ive, private client manager at OM Financial.

"The New Zealand First supporters tend to be older, they tend to see immigration as a big issue, so a lot of the anti-immigration sentiment is concentrated in New Zealand First supporters". The combination would form a new government with a three-seat parliamentary majority. NZ First's 7.2 percent is down from 9 percent in 2014.

But some say Peters could be swayed to go to National given it would be a straightforward coalition between two parties.

Coalition talks in New Zealand entered a new phase Saturday after official final election results narrowed the gap between the two leading parties. Parties receive seats in Parliament in proportion to their party vote share while seats are filled firstly by winning electorate candidates and secondly by candidates on the party's list.

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