LONDON — The FTSE 100 in London bounced 1.8 percent to 7,009.99 in mid-morning trading on Friday, after Britain’s Conservative Party defied pre-election polls to emerge as the winners of the U.K. general election.
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The London market led a Europe-wide upswing, with the FTSE MIB in Milan and the CAC 40 in Paris up 0.7 percent to 23,002.16 and to 5,001.38 respectively while the DAX in Frankfurt rose 0.6 percent to 11,471.83.
Following news that the Tories, led by the current Prime Minister David Cameron, were on track to win a narrow majority of seats in parliament, the pound was up 0.4 percent against the dollar and 0.5 percent against the euro.
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The pound traded at $1.52, while the euro traded at $1.13 and the Swiss franc, $1.09 at 12:00 noon CET.
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Although the final result won’t be tallied until later this afternoon, the BBC has forecast that the Tories will win 331 of 650 parliamentary seats, giving the party a slim majority.
The election results flew in the face of all the pre-election polls, which had predicted a hung parliament, and a minority or coalition government headed by Labour leader Ed Miliband.
Labour, however, lost a substantial number of seats in Scotland to the left-wing Scottish National Party, while the Liberal Democrats, part of the current coalition government, took a beating in the polls and both parties lost high-profile members of parliament.
Nick Clegg, who is currently Deputy Prime Minister, is expected to step down as leader of the Liberal Democrats.
Miliband called Thursday, a “difficult and disappointing” night for Labour while Clegg called it “cruel and punishing” for his party. The British media, meanwhile, is speculating about how the polling companies could have gotten the result so wrong.
Retail and luxury stocks were also on the up, with the morning’s biggest gainers including Primark parent Associated British Foods, 2.6 percent to 29.16 pounds; Tesco, 2.4 percent to 2.29 pounds; Debenhams, 3.2 percent to 0.92 pounds; French Connection, 3.6 percent to 0.44 pounds; and Yoox Group, 2.7 percent to 28.01 euros.
Among the very few stocks that lost ground was Adidas AG, 1.5 percent to 72.14 euros.
Until Wednesday, polls had been projecting no clear winner, which would have resulted in frantic efforts – that could have dragged on for weeks – by the Conservative and Labour parties to cobble together a government.