Embattled Australian Prime Minister Malcolm Turnbull appeared likely to retain power after gaining the support of a key independent on Thursday, although the closeness of the vote signaled more tough political and economic times ahead.

There were signs that the political instability after Saturday's cliffhanger election was beginning to take its toll on the Australian economy, with Standard & Poor's cutting Australia's credit rating outlook to negative from stable, threatening a downgrade of its coveted triple A status.

Turnbull flew to northern Queensland state to win reluctant support from Bob Katter, a maverick former member of the ruling conservative coalition who is now a potential kingmaker if Turnbull is unable to win the 76 lower house seats needed to form government outright.