Pakistan's incoming prime minister Nawaz Sharif on Monday reached out to India and the United States, pledging to strengthen relations after his thumping victory in landmark elections.

Sharif promised Pakistan's "full support" as the United States withdraws combat troops from Afghanistan next year and made overtures to nuclear rival India in a briefing with the foreign media at his family estate outside Lahore.

In an astonishing comeback 14 years after he was ousted by a military coup and briefly jailed, his centre-right Pakistan Muslim League-N (PML-N) is projected to win 130 of the 272 directly elected seats in the national assembly.

"If there are concerns on either side I think we should address those concerns and strengthen this relationship," Sharif told journalists, referring to Pakistan's alliance with the United States which can be notoriously difficult.

The US and NATO are due to withdraw most of their troops from the war against the Afghan Taliban by the end of 2014 and Pakistan will be a key transit point for shipping home equipment overland to the port at Karachi.

"We will extend full support to them and we will see everything goes smoothly," Sharif said, hours after President Barack Obama said Washington was ready to work with Islamabad "as equal partners" and welcomed the transition.

One thorn in the relationship is US drone strikes targeting Taliban and Al-Qaeda militants in the northwestern tribal belt, which are unpopular in Pakistan due to civilian casualties and seen as an infringement of sovereignty.

"This is a very important issue and our concern must be understood properly. We will sit with our American friends and we will certainly talk to them on this issue," Sharif said.

He added that he would be "very happy" to invite India's Manmohan Singh to his swearing-in ceremony and hoped that he would visit soon. The Indian leader on Sunday congratulated him and expressed hope for better relations.

But Sharif's biggest challenges are likely to be closer to home -- fixing the shattered economy, ending an appalling energy crisis and tackling Islamist militancy.

Sharif will likely need only the estimated 27 independents and his proportion of those seats reserved for women and minorities, to secure a majority in the first democratic transition in a country accustomed to long periods of military rule.

The outgoing Pakistan People's Party suffered a crushing defeat, collapsing from 88 directly elected seats to 33, according to newspaper projections, but enough to emerge as the second largest party and likely to go into opposition.

Its chairman Makhdoom Amin Famin said Sunday: "We have our reservations on the transparency of the elections but for the sake of political stability in the country we accept the results."

Cricket star Imran Khan, who promised a "tsunami" propelling him into power, appeared to have slipped into third place on 29 seats -- still an astonishing achievement for a party which previously won only one seat in 2002.

His Pakistan Tehreek-e-Insaf (PTI) will try to form a provincial government in the Taliban-hit northwest, but go into opposition at the national level.

PTI supporters carried out protests in Islamabad, Lahore and Karachi on Sunday over alleged rigging in a handful of seats.

Ishaq Dar, who served in Sharif's second administration and again briefly in 2008, will again return as finance minister, a PML-N spokesman said.

In Karachi the benchmark index of top 100 shares rose 1.6 percent to 20,250.42 points in afternoon trade, surpassing the 20,000 mark for the first time as the election results defied analysts' predictions of a weak parliament.

Investors are hopeful of an economic revival under Sharif, whose privatisation policies earned him a good reputation among traders and industrialists during his two previous tenures in the 1990s.

High turnout, estimated at around 60 percent by the election commission, in Saturday's polls was a positive step for democracy even though the campaign was marred by violence and irregularities, an EU observer mission said.

Violence in the run-up to polls and on election day itself killed over 150 people, according to an AFP tally, as the Taliban declared the polls unIslamic.

After the election commission finalises the results later Monday, the president will have to summon the new parliament within three weeks.