European stocks raced ahead and the euro soared as investors priced in the prospect of Emmanuel Macron beating Marine Le Pen in the second round of voting in the French presidential election.
The FTSE 100 Index clawed back some of the losses triggered by last week's announcement of a snap general election, closing up 150.13 points at 7,264.68 and adding more than £38 billion to the value of blue-chip companies.
France's Cac 40 rocketed by 4% to 5,268.85 and Germany's Dax climbed 3.4% to 12,454.98, as banking shares bolstered European markets.
The FTSE 250 Index, seen as a better barometer of the health of UK business, rose 1.3% to reach an all-time closing high of 19,602.83.
Mr Macron and Ms Le Pen are locked in a two-horse race to become the next French president after they emerged victorious in a first-round vote that knocked out established parties and ensured a radically different future for France.
The euro led the charge on the currency markets as traders cheered the likelihood of centrist Mr Macron bringing a degree of calm to financial markets by defeating the populist politics of Ms Le Pen.
The move left sterling down 1.3% against the euro at 1.17, while the pound dropped 0.2% versus the US dollar at 1.27.
Colin Cieszynski, chief market strategist at CMC Markets, remained cautious about pencilling in a victory for Mr Macron.
He said: "Although Macron finished ahead by a small margin in this round, the French establishment has rallied behind him, early polls show him leading for the second by 62% to 38%.
"Traders appear to have taken the results and polls to suggest the second round as a mere formality and anointed Macron the winner.
"Traders rushing to get back on the EU bandwagon, however, might want to recall that we saw a similar spike in UK markets a week before the Brexit vote last June as traders got over-confident that Remain would win and we all saw how that ended."
On the oil markets, Brent crude fell 0.8% to 51.55 US dollars a barrel amid concerns over an increase in US drilling activity.
In UK stocks, heavyweight financial firms dominated the biggest risers as the French election cheer spread to the London market.
Barclays jumped more than 5% or 11.3p to 219.2p, while Standard Chartered lifted by 32.6p to 718.5p and Royal Bank of Scotland rose 9.5p to 249.3p.
Energy stocks were among a small number of fallers, with investors reacting to news that the Tory manifesto will include a policy to cap energy bills.
It has been reported that Mrs May will try to reduce them by around £100 a year for an average family by capping gas and electricity bills for households paying standard variable tariffs.
British Gas owner Centrica was the biggest faller, down more than 3% or 7.3p to 200.4p, and SSE fell 28p to 1,417p.
Away from the top tier, real estate investor Kennedy Wilson Europe surged 14% after agreeing an all-share merger with Kennedy Wilson Holdings.
Shares were up 131.5p to 1,110p as the FTSE 250 firm said the tie-up would create a "leading real estate investment and asset management platform", with a market capitalisation of £4 billion.
The biggest risers on the FTSE 100 Index were Smurfit Kappa up 120p to 2,103p, Barclays up 11.3p to 219.2p, CRH up 145p to 2,854p, and International Consolidated Airlines Group (IAG) up 27p to 569p.
There were three fallers on the FTSE 100 Index - Centrica down 7.3p to 200.4p, SSE down 28p to 1,417p, and Randgold Resources down 100p to 6,970p.
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