London stock market surges on election results

London’s stock market surged at the start of trading on Friday as Prime Minister David Cameron’s Conservatives looked set for a surprise victory in Britain’s general election.

The benchmark FTSE 100 index rallied in initial deals, up 1.88 percent to 7,016.07 points.

The British pound had already jumped overnight after exit polls showed a victory for the Conservatives, seen as more business-friendly than the main opposition Labor party.

“A night of victory for the Conservative party has put UK markets on the front foot, with sterling and the FTSE moving higher,” said Chris Beauchamp, senior market analyst at IG trading group.

“For investors, the results… mean that they can cease worrying about the UK economy, and focus on the other areas of concern, like Greece and whether the Fed will hike rates this year.”

Results in so far have upended pre-election forecasts of a knife-edge contest with the main opposition Labour party.

“The result removes the risk that the economy suffers a prolonged period of political uncertainty,” said Vicky Redwood, chief UK economist at Capital Economics research group.

Market focus Friday was set also to be on the United States with the world’s biggest economy publishing key monthly jobs data.

In early deals, Frankfurt’s DAX 30 stocks index was up 0.77 percent to 11,495.66 points and the CAC 40 in Paris won 0.66 percent to 5,000.16 compared with Thursday’s closing levels.

“While investors in the UK will no doubt be focused on events in London there is also the added complication of the latest US employment report for April, which could go some way to gate crashing events today,” said Michael Hewson, chief market analyst at CMC Markets UK.

“Today’s numbers are even more important in the context of the recent slowdown seen in the US economy in the first quarter of this year, which has put back rate hike expectations in to the second half of this year and in the process sent the US dollar tumbling.”