(Bloomberg) — The pound jumped as early results in the U.K. general election suggested the Conservative Party would win the most seats, easing investor concern that drawn-out negotiations would be needed to form the next government.

Sterling surged the most since 2009 against the euro and the dollar, and strengthened at least 1.5 percent versus all of its 16 major counterparts. Measures of anticipated swings in the currency tumbled and analysts predicted stocks would rise when the market opened on Friday.
In the run-up to the election, the Conservatives focused on their economic credentials, with surveys showing them to be the the most-trusted party on that subject. An exit poll showed they were set to be the largest party, just short of a majority, in a hung Parliament. And as early results were declared, Labour failed to gain key target seats in central England, with the pound rising as the Tories increased their share of the vote.
“Results seem to support exit-poll signals, but there is also a flirtation with the possibility of Conservatives securing an overall majority,” said Daragh Maher, a foreign-exchange strategist at HSBC Holdings Plc in London. It’s a positive for the pound “on the basis that we may face less uncertainty if the Conservatives are close to full majority, and also because historically the pound rallies on a Conservative win.”
The British currency strengthened 2.2 percent to 72.29 pence per euro at 5:37 a.m. London time, the biggest gain since January 2009, based on closing-market data. It jumped 1.8 percent to $1.5514, reaching the highest level since Feb. 26.
Invesco Asset Management would look to increase its pound exposure, though “not aggressively,” if the exit poll is confirmed, said portfolio manager Sean Connery. The FTSE 100 Index of stocks may open 70 points higher if the exit poll proves accurate, Joshua Raymond, chief market strategist at City Index in London, wrote in a Tweet. The index closed at 6,886.95 on Thursday, the lowest since April 2.