Europe open: Investors hopeful for soft Brexit after surprise election result

European markets began the session on the frontfoot as investors tried to determine whether Thursday night's surprise general election result in the UK would increase the chances of a softer Brexit or if it might even force the Prime Minister to step aside.

The benchmark Stoxx 600 was lower by 0.12% to 388.68 as of 08:59 BST, but aside from the FTSE 250 all the major national indices were in fact higher. Germany's Dax was up by 0.23% to 12,742.29, alongside gains of 0.20% to 5,275.02 for the French Cac-40 and an advance of 0.34% to 21,114.32 for the FTSE Mibtel.

Yet where the real action was taking place was in foreign exchange markets, with the single currency climbing by 1.63% to 0.8798 versus the pound.

"Britain's inconclusive election means it is a question of when, not if, the country heads to the polls again in the near future," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

However, despite the higher uncertainty Tombs also believed a 'soft' Brexit was now the most likely outcome, meaning that sterling might rise sharply in the medium-term.

Overnight, and pending the definitive results, the Conservatives appeared to have lost their majority in parliament although they could manage a working majority if they reached an agreement with the Democratic Unionist Party.

On that point, Tombs believed it unlikely such a combination would last long given the tendency of governments to lose seats in by-elections.

Economic data out from the euro area on Friday morning was mixed.

On a positive note, Germany's trade surplus fell from €25.3bn in March to €18.1bn for April (consensus: €23.0bn).

French industrial production on the other hand sharnk by 0.5% month-on-month (consensus: 0.3%).

Air France-KLM reported a 6.1% jump in traffic for the month of May amid a 1.6% percentage uplift in its passenger load factor to 85.7%.

Shares in the more domestic-facing UK-listed companies such as Tesco and Taylor Wimpey weakened on the heels of the surprise election result.