Pound hits fresh highs as business-friendly Conservatives expected to win

A business-friendly government predicted to win near-majority in UK general election as swings to Labour fail to materialise and Lib Dems face huge losses, says the Guardian. The expectations triggered sharp gains for the British pound on Friday.

London's FTSE 100 is expected to open above 7000.

Sterling surged to $1.5470, and tapped as high as $1.5523 overnight. The pound had been trading at $1.5249 ahead of the election, and at $1.5247 late Wednesday in New York.

As MarketWatch reported, an initial jump for the pound came late Thursday as exit polls showed a strong result for the Conservatives.

The pound was up 0.8% to $1.38040 against the euro.

The FTSE 100 - which closed down 47 points at 6,887 on Thursday, before the exit poll was published - was expected to open as much as 2% higher. There were some suggestions that the London market would open above 7000.

“Markets hate uncertainty,” said Louise Cooper, independent analyst at Cooper City, in a note.

“Cameron has governed for the last five years and investors know what they are getting with Cameron and [Chancellor George] Osborne. Better the devil you know and all that,” she said.

Exit surveys are predicting the Conservatives would win 316 seats in Parliament, while the main opposition Labour Party would get 239, in a race that was expected to be tight after a neck-and-neck campaign. The surprise in the election has come after months of pre-election surveys which showed no favorite of the election. If the exit polls are correct, Cameron is expected to keep his job as prime minister.