By Walter Bianchi

BUENOS AIRES (Reuters) – Argentina’s Peronists licked their wounds on Monday after a damaging midterm election defeat, where the conservative opposition gained in key congressional battles across the country and erased the ruling coalition’s Senate majority.

The opposition Juntos coalition, badly defeated in presidential elections in 2019, hammered the ruling Frente de Todos party by almost 20 points nationwide in the battle for the Senate, where a third of seats were up for grabs.

In the lower house, it won by a slightly smaller but still important margin of around eight percentage points, winning a close battle in the important province of Buenos Aires, the most populous region of the country and a Peronist stronghold.

“The people made themselves heard,” said Beatriz Arguello, a housewife in her seventies in the capital city. “Now we hope for some change.”

Argentine center-left President Alberto Fernandez said after the vote that he would listen to the people and pledged a new stage for the country. He called for the opposition to find consensus with the government.

That will be key after the Peronists lost their majority in the Senate, which they had held since 1983, meaning Fernandez and his more radical vice president, Cristina Fernandez de Kirchner, will need to reach across the aisle.

Local newspapers reacted to the defeat by splashing front pages with comments such as “hard electoral defeat” and “devastating diagnosis.” The more party-allied Pagina 12 looked for positives: “Defeat, but the fight goes on.”

Markets reacted mutely with sovereign bond prices up slightly. Analysts generally see the result as positive if it forces the government to work more closely with the opposition, favored by investors.

Voters, meanwhile, called on the government and opposition to get to work solving the country’s many problems with inflation above 50% annually, the peso currency at record lows against the dollar and over four out of 10 people in poverty.

“It is a result that was expected. It is time for all politicians to get to work to get this country out of the hole it’s in,” said Heactor Lopez, 60, a small-business owner.

Opposition leaders cheered. Former President Mauricio Macri said the conservatives needed to build on the win, while party grandee Patricia Bullrich heralded the “great choice” by voters.

“The best thing: we managed to get the quorum from Cristina Fernandez de Kirchner in the Senate!” she said on Twitter.

Government supporters pointed to an improvement versus the primary vote in September and a narrower defeat in Buenos Aires province, lost by just over one percentage point.

“They ended the day by asking please stop counting votes because the difference was getting smaller and smaller,” said 35-year-old Jimena Cueva, who held out hope the ruling coalition could bounce back to win the presidential vote in 2023.

Shila Vilker, head of consultancy Trespuntozero, said the government had already “paid” a large part of the cost of defeat after the open primary vote, which led to a major cabinet reshuffle, though the loss of the Senate majority would hurt.

“I’d say it’s a dignified defeat for the government, and a dignified non-catastrophic defeat gives it some air to continue,” she said.

(Reporting by Walter Bianchi, Juan Bustamante, Nicolas Misculin; Editing by Adam Jourdan and Steve Orlofsky)