Senegal wakes to new era after Wade bows out DAKAR (Reuters) - Residents of Senegal woke up to a new future on Monday after challenger Macky Sall defeated long-serving leader Abdoulaye Wade in elections, widely praised for cementing the country's reputation as West Africa's most stable democracy. Excited residents gathered at tea shops as boys hawked newspapers splashed with headlines like 'Wade Knocked Out', after a night marked by fireworks, honking horns and singing in parts of the capital Dakar. "This is a victory for all Senegalese people, not just the politicians," said Bassirou Sylla, 32, a trader in Dakar's upscale neighborhood of Point E. The election was the latest test for democracy in a region plagued by bloodshed and flawed votes, including Ivory Coast's which triggered a civil war last year. A military coup in Senegal's neighbor Mali last week demonstrated how quickly a democracy can unravel. Wade, whose 12-year rule saw big infrastructure spending but little progress in tackling poverty, He admitted defeat in the election just hours after the polls closed, as early results showed Sall with a landslide, maintaining Senegal as the only nation on mainland West Africa not to have seen a coup or civil war since independence. While hopes for a better future were running high in Dakar, where Wade faced his harshest opposition, it remained to be seen whether Sall, who is a former Wade ally and served for years as his prime minister, would bring real change. The United Nations, the European Union and the African Union congratulated Senegal on its smooth election, and French President Nicolas Sarkozy praised Wade for accepting his loss. "By accepting the choice of your countrymen, you have once again shown your dedication to democratic principles," Sarkozy said in a letter addressed to Wade. Senegal is the only nation on mainland West Africa not to have seen a coup or civil war since independence. Wade, 85, began his career as president with a sterling democratic reputation but drew criticism for seeking to extend his rule with a third term, setting off street protests in which six people were killed. Sall campaigned for Sunday's election on lowering the cost of living, including by cutting taxes on rice. Serigne Bakhoum, a taxi driver who said he voted for Sall, said the country where average daily income is $3 was now pinning its hopes on Sall for change. "We are demanding that President Macky Sall follow through on his campaign promise to bring down the price of fuel, which is too high in Senegal," he said. I'm waiting impatiently to see what he will do. The ruling set off weeks of protests in which at least six people died. Early results from Dakar, where Wade has faced his harshest opposition, showed Sall ahead, including in Wade's own precinct in the Point E neighborhood with 417 votes to Wade's 120. Wade fell short of the outright majority needed to avoid a run-off in the February 26 first round, with 34.8 percent to Sall's 26.6 percent. Defeated candidates then united behind Sall. Senegal $500 million Eurobond, which analysts said depreciated before the first round vote due to the deteriorating political and security climate, rallied early on Monday. The bond rallied intraday to a price of 109, from 105.25 on Friday, and the yield fell to 7.4 percent, from 7.9 percent, respectively. This suggests the market reacted positively to the smooth run-off election and power shift in Senegal," said Samir Gadio at Standard Bank. Additional reporting by Mark John, Simon Akam, Emmanuel Braun, Richard Valdmanis, and Bate Felix; Writing by Richard Valdmanis and Mark John; Editing by Mark Heinrich