WRAPUP 1-UK markets rally as Conservatives head for outright election win
By Patrick Graham and Sudip Kar-Gupta
LONDON May 8 (Reuters) - British financial markets rallied on Friday as election results pointed to a shock outright victory for Prime Minister David Cameron's Conservative Party, wiping away the uncertainty for investors that a hung parliament had threatened to deliver.
The main FTSE 100 stock market surged towards last month's record high, sterling was on course for its biggest daily rise against the euro since 2009 and UK government borrowing costs fell.
The Conservatives, who are generally perceived to be more market-friendly than the opposition Labour Party, were poised to win an outright majority of the 650 seats up for grabs with most of the results in.
"A bolt from the blue," said Alan Monks, UK economist at JP Morgan.
Traders and investors breathed a collective sigh of relief and put to one side the longer-term challenges that lie ahead, some of which may have suddenly become more pressing as a result of the way the vote panned out.
"As far as markets are concerned it is good news. A Conservative victory is preferable over a Labour-SNP coalition and that's why we see sterling and UK equities higher," said Jonathan Bell, chief investment officer at Stanhope Capital.
In early UK trading, the FTSE 100 index was up 1.6 percent at 7,000 points, led by banks, utilities and real estate shares. Last month, the FTSE hit a record high of 7,122.74 points.
The FTSE 250 mid-cap index hit a record high of 18,161 points on Friday. Continuación...