* Ruling party majority slips after half of results emerge
* Vote not perfect but fair overall - observers
* Stocks edge higher on optimism over poll
(Adds detail, quote par 4-5)
By Joe Brock
ABUJA, April 11 (Reuters) - Nigeria's ruling party lost more ground on Monday in results emerging from an election that will loosen its grip on parliament in Africa's most populous nation.
Results declared for half the seats in the national assembly suggested the People's Democratic Party's (PDP) was on course for a majority, but not of the size which has allowed it such dominance since army rule ended in 1999.
Despite chaotic organisation and violence in the run-up to the poll, it was hailed as one of the fairest ever in the country of 150 million, where President Goodluck Jonathan is standing in a more important presidential ballot this Saturday.
"Compared to past elections, (the vote) provided a real opportunity for citizens to exercise their right to vote," the National Democratic Institute observer mission said on Monday.
But it sounded a note of caution, with results yet to emerge from many states 48 hours after the polls closed.
"The tabulation process and the announcement of results have not been completed. In the past, this has been a process during which serious irregularities have emerged," NDI added.
The Independent National Electoral Commission (INEC) said there was no cause for alarm over the delays.
"This country is a vast expanse ... If you go across some parts of the country it can take an entire day to get from a polling unit to the local government area, so 48 hours is not a long time," said INEC spokesman Kayode Idowu.
Optimism over the poll helped lift Nigerian stocks, traders said. The all-share index edged up 0.55 percent. [ID:nLDE73A26Y] <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphic on elections: http://link.reuters.com/xet78r For more stories, background and analysis: [nLDE68H051] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
REGIONAL LOSSES
Jonathan's PDP party lost out to the Action Congress of Nigeria (ACN) in the southwest and to the Congress for Progressive Change (CPC) in parts of the north -- the vote highlighting Nigeria's regional divisions.
ACN won some seats outside its home region, both in the north and the south, and had already almost doubled its parliamentary presence with only half of results in.
The ruling party has nevertheless made gains in some areas and held many traditional strongholds. Of seats declared for the House of Representatives, it had just over half compared to 77 percent in the outgoing parliament. [nLDE73A0KF]
A more diverse parliament is over time seen strengthening democracy in Africa's third biggest economy.
But in the short-term it could slow down the passage of key legislation, including wide-ranging and long-delayed reforms to Africa's largest energy industry. [ID:nLDE73A0WO]
Many of the areas still to declare results have previously been dominated by the PDP. The CPC could still pick up seats in northern states yet to be declared.
The presidential election is expected to bring a much higher turnout to the country's 120,000 polling units.
Jonathan is widely expected to win. Although the parliamentary vote highlighted the growing strength of the opposition in a fairer vote than has been held in the past, the ruling party was still very much on top.
Isolated reports of ballot box snatching, assaults on party officials and a poorly handled electoral process in some areas have prompted a handful of losing candidates to contest results.
There were protests in parts of Jonathan's home state of Bayelsa in the Niger Delta, where the electoral commission said it could not announce a result from some wards because of irregularities in the voting process.
"There is a plot to embarrass the president and Bayelsans," Henry Ofongo, one of the ruling party candidates told a news conference shortly before being led away by officers of the State Security Service.
But observers said the overall vote had not been marred and there were nowhere near as many complaints as in the past.
(Editing by Matthew Tostevin)
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