ANALYST VIEW-Argentina vote headed for runoff between ruling Peronist and radical Milei

LONDON, Oct 23 (Reuters) - A stronger-than-expected showing by Argentina's ruling Peronist coalition at a general election on Sunday has set the stage for a run-off vote on Nov. 19 between Economy Minister Sergio Massa and far-right radical Javier Milei. * Argentina's international dollar-denominated sovereign bonds slipped with longer-dated issues down as much as 4 cents before clawing back much of the losses * U.S. listed shares of Banco BBVA Argentina were down 4.3% pre-market

Below are reactions from analysts to the results:

EIRINI TSEKERIDOU, JULIUS BAER, ZURICH, SWITZERLAND

"Argentina’s next president will be facing a challenging economic environment, as inflation keeps rising, FX pressures are mounting, and the fiscal situation remains fragile. We expect Argentinian assets to remain volatile ahead of the November run-off due to policy uncertainty and spending pushing inflation higher."

RENAN SENA, BANK SYZ, GENEVA, SWITZERLAND

"No party will have an outright majority, and some coalitions between parties will be required to govern. The absence of clear congressional backing gives rise to concerns regarding the capacity to effectively lead and put extensive reforms into action.

"Considering the imminent program revision by the IMF set for November, it is essential to acknowledge that the absence of a stable administration could potentially protract the negotiation process, exacerbating the pre-existing financial tensions. Consequently, it is reasonable to anticipate that volatility within the Argentine market and currency will perdure."

CHRIS TURNER, ING, LONDON, UNITED KINGDOM

"The incumbent party's candidate, Sergio Massa, did better than expected. However, he will enter into a run-off with libertarian candidate, Javier Milei, on 19 November. The next month should offer little respite for the beleaguered Argentine peso caught between the monetary-financed spending plans of Massa and the animosity shown to the peso by Milei."

ANDRES ABADIA, PANTHEON MACROECONOMICS, NEWCASTLE, UNITED KINGDOM

"The markets will probably perform poorly in the very short term, since the best case scenario was that there would be a second round between Bullrich and Milei. So it is very likely that in the short-term the fiscal situation will worsen with Massa, since he will do everything in his power to win the election.

"This will mean that in the near and medium term we will see higher inflation and a more significant contraction of the economy. On the other hand, it is possible that the (Argentine peso) will remain at 350 until November, but the situation on the street will remain quite difficult."

SERGIO ARMELLA, GOLDMAN SACHS, NEW YORK, UNITED STATES

"Investors’ attention will turn its focus to two points. First, any announcements by the two candidates advancing to the second round. When it comes to Mr. Massa, given his capacity as finance minister and candidates, policy announcements will be key.

"Policy missteps are something that Argentina cannot afford at this juncture. Inflation is tracking at 138% and accelerating, currency and financial pressures are building up, economic activity is contracting, the fiscal deficit is widening, international reserves are at critically low levels, and net international reserves are negative. For Mr. Milei, any announcement of cabinet positions in an eventual government, for example the finance minister, will be key."

DIEGO W. PEREIRA, JPMORGAN, NEW YORK, UNITED STATES

"Despite wider macro-imbalances, the recent general election results have shown that neither the deteriorating macro nor corruption scandals appear as decisive drivers to gauge the performance of the incumbent. More relevant will be how the transference of votes will operate between the different forces, especially the migration of (Patricia) Bullrich’s and (Juan) Schiaretti’s support.

"Proving competitive going into the runoff, in the weeks through Sunday November 19th, the government is expected to continue to pull rabbits out of a hat in an attempt to muddle-through and avoid a disordered devaluation."

MARIANO MACHADO, PRINCIPAL AMERICAS ANALYST, VERISK MAPLECROFT, MALAGA, SPAIN

"It is true that in the first round, societal mood shied away from radical change; but in the second round, pro-change voters may shift to Milei to oust Kirchnerism from power.

"Economically, the next weeks will be crucial. The combination of a libertarian candidate pushing for dollarisation, with minister Massa hiking the money-printing machine to produce a political miracle for ‘candidate’ Massa could finally push macroeconomic variables off the cliff’s edge." (Reporting by Karin Strohecker, Jorgelina do Rosario, Bansari Mayur Kamdar and Natalia Siniawski, editing by Kirsten Donovan, Bernadette Baum and Emelia Sithole-Matarise)