Law & Justice won 37.7 percent of the vote and a projected 232 seats in the 460-member lower chamber, the first time that a single group will command a majority since the re-introduction of democracy in Poland in 1989, according to a revised Ipsos exit poll. The ruling Civic Platform, which oversaw a 24 percent expansion of Poland’s economy over its eight years in power, came second with 23.6 percent and 137 seats. Three other parties cleared the threshold for representation.

The rise of Law & Justice marks the newest challenge for a European Union that’s more divided than at any time since former communist states joined in 2004. While Poland’s currency, stocks and bonds have underperformed emerging-market peers amid investor concern that the opposition will hurt banks’ profits or spend too much, analysts at banks including UniCredit SpA and PKO Bank Polski SA expect markets to rebound following the vote. Standard & Poor’s, which hasn’t changed Poland’s debt rating since 2007, said it may cut its outlook to stable if fiscal and monetary policies were reversed. […]

Tapping concerns among some of its conservative Catholic base that too many Muslims are being allowed into Europe, Law & Justice opposes German-led efforts forcing EU member states to take in more migrants. It’s against plans to curb CO2 emissions, which would hit the country’s unprofitable coal mining industry. It also seeks western support for a greater NATO presence on Polish soil.