* Election result bolsters British shares
* Syngenta rallies after rejecting Monsanto bid
* Calmer bonds, U.S. job data boost sentiment (Updates closing prices)
By Francesco Canepa
LONDON, May 8 (Reuters) - European equity indexes rebounded on Friday, led by UK shares after election results showed Prime Minister David Cameron’s pro-business Conservatives had won a further five years in power.
Broader market sentiment was also supported by a return to calm in U.S. and European government bonds as well as U.S. data that showed job growth regaining momentum and the unemployment rate dropping to near seven-year lows.
The FTSEurofirst 300 index of pan-European shares ended 2.8 percent higher, while Britain’s blue-chip FTSE 100 closed up 2.3 percent following the election.
“While the City is pro-Tory by nature, traders have been celebrating a victory for continuity as much as for the Conservatives,” said Marcus Bullus, trading director at MB Capital.
British bank Lloyds rose 5.7 percent as the threat of a Labour-proposed banking levy disappeared while utility Centrica, which might have been hit by a tariff freeze under a Labour government, added 8.1 percent. British defence group Babcock gained 9.4 percent.
“As far as markets are concerned, it is good news,” Stanhope Capital’s chief investment officer Jonathan Bell said.
“A Conservative victory is preferable over a Labour-SNP coalition and that’s why we see sterling and UK equities higher and the sectors that were under threat from a Labour policy, such as financials and utility (shares), are going to do well.”
Meanwhile, agrochemicals firm Syngenta soared 19.3 percent after it rejected a $45 billion takeover offer from Monsanto, saying the offer was too low and did not fully take into account regulatory risks.
Nokia gained 4.1 percent after taxi service Uber submitted a $3 billion bid for the Finnish firm’s map business HERE, the New York Times reported.
The FTSEurofirst 300 index had fallen 6 percent from a 14-1/2 year peak hit in April as a rebound in oil prices raised prospects of an early U.S. interest rate hike at a time of patchy economic growth.
Euro zone government bonds had sold off sharply while the euro rebounded against the dollar, dulling the euro zone’s export prospects.
“There will be a bit of a relief rally (after the UK election) and then people will go back to focus on the global economy,” Paul Sedgwick, head of investment at money manager Frank Investments.
“If bonds stabilise, I think equity markets will do well.”
Holcim investors backed a capital increase in a vote, paving the way for the Swiss cement maker’s planned $40 billion merger with France’s Lafarge.
Europe bourses in 2015: link.reuters.com/pap87v
Asset performance in 2015: link.reuters.com/gap87v
Today’s European research round-up
Additional reporting by Liisa Tuhkanen; Editing by Gareth Jones