London open: Stocks surge as Conservatives look set for election win

The FTSE 100 was up 1.5% at 6,989.60 in early trade, with banks and utility stocks leading the charge.

Lloyds Banking Group, Royal Bank of Scotland and Barclays jumped ahead. Labour had threatened to break up the banks and potentially hit them with a one-off bonus tax and a higher bank levy. Shares in utilities Centrica and SSE also rose sharply as the threat of an energy price cap by Labour dissipated.

The Conservatives looked set to win 329 seats in Parliament out of a possible 650, which would give the party a working majority. Tensions had been running high in the run-up to the election, as opinion polls suggested the race would be tight, with a hung parliament the most likely outcome.

“As David Cameron is set to retain the keys to No. 10, with an increased number of Conservative MPs, the way ahead in economic policy terms looks very much like ‘steady as she goes’, especially since they look likely to govern alone,” said Chris Beauchamp, senior market analyst at IG.

“For investors, the results from last night 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,” he added.

On the economic agenda, market participants are likely to eye the release of US nonfarm payrolls and the unemployment rate later in the day, although the data may well be overshadowed by euphoria over the election result.

Shares in Man Group rose sharply after the company said funds under management increased 7% in the first quarter of 2015.

InterContinental Hotels Group was also on front foot, as it said first-quarter revenues per available room, the key metric for the industry, were up 5.9% in comparable terms.

British engineering firm Rolls Royce maintained its full-year guidance for 2015 on Friday, but warned that revenue for could take a £350m hit as a result of unfavourable currency rates.

BG Group said on Friday that its core earnings fell a staggering 41% in the first quarter compared to the same period a year earlier, weighed by depressed oil and gas prices.

Market Movers
techMARK 3,248.51 +1.64%
FTSE 100 6,993.04 +1.54%
FTSE 250 17,903.11 +2.61%

FTSE 100 - Risers
Centrica (CNA) 275.10p +6.88%
Babcock International Group (BAB) 1,054.00p +6.46%
Lloyds Banking Group (LLOY) 87.12p +6.08%
Capita (CPI) 1,227.00p +5.78%
St James's Place (STJ) 945.50p +5.35%
Royal Bank of Scotland Group (RBS) 349.80p +5.33%
Persimmon (PSN) 1,734.00p +4.90%
SSE (SSE) 1,640.00p +4.86%
Barratt Developments (BDEV) 537.00p +4.68%
Barclays (BARC) 260.10p +4.50%

FTSE 100 - Fallers
Royal Dutch Shell 'A' (RDSA) 2,035.00p -0.39%
Pearson (PSON) 1,304.00p -0.38%
Unilever (ULVR) 2,833.00p -0.11%
Rolls-Royce Holdings (RR.) 1,016.00p -0.10%

FTSE 250 - Risers
Ladbrokes (LAD) 116.30p +10.13%
Berkeley Group Holdings (The) (BKG) 2,709.00p +8.75%
Savills (SVS) 899.00p +7.92%
Countrywide (CWD) 574.00p +7.69%
Laird (LRD) 380.40p +6.50%
Crest Nicholson Holdings (CRST) 458.30p +5.70%
Electrocomponents (ECM) 257.60p +5.66%
Shaftesbury (SHB) 860.50p +5.65%
William Hill (WMH) 394.20p +5.29%
TR Property Inv Trust (TRY) 310.50p +5.18%

FTSE 250 - Fallers
Euromoney Institutional Investor (ERM) 1,167.00p -1.19%
Infinis Energy (INFI) 188.50p -0.26%
Brit (BRIT) 278.50p -0.18%
Pace (PIC) 413.40p -0.14%
NB Global Floating Rate Income Fund Ltd GBP (NBLS) 96.35p -0.10%
British Empire Securities & General Trust (BTEM) 541.00p -0.09%

FTSE TechMARK - Risers
Ricardo (RCDO) 870.00p +3.33%
NCC Group (NCC) 215.00p +2.99%
Skyepharma (SKP) 275.75p +2.99%
Oxford Biomedica (OXB) 12.00p +2.13%
Sepura (SEPU) 147.00p +1.38%
KCOM Group (KCOM) 92.25p +1.37%
SDL (SDL) 467.75p +0.97%
Innovation Group (TIG) 28.50p +0.89%
Spirent Communications (SPT) 86.75p +0.87%
Dialight (DIA) 715.00p +0.63%

FTSE TechMARK - Fallers
Vectura Group (VEC) 154.25p -0.80%
E2V Technologies (E2V) 225.00p -0.66%