BERLIN (Reuters) - Chancellor Angela Merkel's conservatives were set to keep power in the east German state of Saxony after winning an election on Sunday but a new rival on the right, the Alternative for Germany (AfD), looked like getting its first seats in a state assembly.
Exit polls after voting closed at 6 p.m. (1600 GMT) showed Merkel's Christian Democrats (CDU), who have run Saxony since German unification in 1990, winning almost 40 percent, followed by the Left and Social Democrats in second and third place.
The Eurosceptic AfD, founded in early 2013 to oppose the euro zone bailouts, beat all forecasts with about 10 percent, according to exit polls.
CDU state premier Stanislaw Tillich must find a new partner if the Free Democrats drop out of the state assembly in Dresden, as exit polls suggested. He is likely to form a coalition with the SPD, Merkel's junior partners in the federal government.
(Reporting by Stephen Brown and Annika Breidthardt; Writing by Stephen Brown)