Germany's Social Democrats (SPD) said on Wednesday they had agreed to start talks on a possible coalition with Friedrich Merz's conservatives but stressed their support was not automatic and hit out at his negotiating style.

Germany's Social Democratic Party faces a lack of leadership following its defeat on February 23, having garnered only 16.5% of the vote, its worst score since 1945.

Germany’s Social Democrats are taking steps to revamp their leadership as a role in a new government beckons, even though Chancellor Olaf Scholz’s party slumped to its worst election result since World War II.

Provisional results confirmed that mainstream conservatives led by Friedrich Merz won Germany's national election​, while far-right party AfD surged to become the nation's second-largest.

Financial markets rose on the likelihood of a two-party coalition between the CDU/CSU and the SPD, with Germany's benchmark DAX Index up 0.7%. Click to read.