Sharif poised to take over as Pakistan PM

But Mr Khan added that his party was collecting evidence of alleged vote-rigging.

"The turnout in defiance of the threats against the process was an extraordinary vote of confidence in democracy itself," European Parliament member Richard Howitt told a news conference in Islamabad.

Shares rally

The election appears to have paved the way for the first transition from one elected government to another in a country prone to military takeovers.

The Karachi stock exchange hit a record high on the expectation of a Sharif-led government. He is seen as favouring the free market and deregulation.

Ishaq Dar, a senator, has been chosen to serve as finance minister in the new administration. He held the same post in Mr Sharif's second government in 1998 and 1999 and again in 2008.

Mr Sharif - who was toppled in a military coup in 1999 and spent years in exile - held talks on Sunday on forming a government.

Imran Khan, still bedridden after a fall at a campaign rally, said the election would boost Pakistan's young democracy.

"We are now moving towards democracy. I congratulate the nation on the numbers in which they turned out to vote," he said.

But Mr Khan added that his party was collecting evidence of alleged vote-rigging.

New course

President Obama congratulated Pakistan on successfully completing the election and said he looked forward to working with the government that emerged.

He welcomed the "historic, peaceful and transparent transfer of civilian power" but stopped short of naming Mr Sharif.

During his election campaign, Mr Sharif said he would end Pakistan's involvement in the US-led war on terror.

However, he declined to say whether he would call a halt to military operations against the Taliban and al-Qaeda.

The Indian prime minister said he hoped for a "new course" in relations between India and Pakistan.