The FTSE 100 has topped the 6,000 mark for the first time in a month as stock markets rally after Joe Biden’s US election victory.
It followed overnight gains in Asia, with Japan’s Nikkei hitting a 29-year high after the confirmation of the result over the weekend.
The FTSE 100 jumped by as much as 1.7%, or more than 100 points, in early trading while indices in France and Germany saw similar increases.
Mr Biden’s defeat of Donald Trump has eased fears about a continuation of a damaging trade war between the US and China, the world’s two biggest economies.
The Nikkei and China’s Shanghai Composite were each up by about 2% while Hong Kong’s Hang Seng and South Korea’s Kospi each added just over 1%.
In London, the mood was also helped by an upbeat profit outlook from house builder Taylor Wimpey, which cited a quicker than expected recovery in the market from its coronavirus-induced slump.
That lifted its shares by 12%, pushing it to the top of the FTSE 100 risers’ board, and also propelling rivals such as Barratt and Persimmon higher.
Markets had already enjoyed a strong run last week as it looked increasingly likely that Mr Biden was on course to amass enough electoral college votes to defeat Mr Trump.
That had helped them to recover after a recent period when sentiment has been weakened by fears about the impact of rising coronavirus cases and new lockdowns.
Hopes that the new US administration can enact a fresh round of economic stimulus have been dampened by the likelihood that congress will remain divided.
But on the other hand the absence of a “blue wave” sweeping Democrats to power in both the White House and the Senate means investors seem less likely to have to worry about higher taxes and tougher regulation for some big companies.
There is also the expectation that the US Federal Reserve, America’s central bank, will continue to provide much-needed monetary policy help to the coronavirus-battered economy.
The Fed has already cut interest rates and pumped trillions of dollars into the economy.
Richard Hunter, head of markets at interactive investor, said: “It is the first opportunity for markets to react to the Biden news from the weekend and the early signs are promising.
“Asian markets had a brisk and positive session on hopes of a less fractious relationship between the US and China in the immediate future.
“Despite the likelihood of the election result being contested, the fact that congress will be divided is now being priced in, which is seen as a tailwind for markets since sweeping changes are more difficult to introduce.”
Jeffrey Halley, senior market analyst for Asia Pacific at OANDA, said: “Equity markets are on fire today following the US elections being called for Joe Biden.
“Mr Biden is perceived as being more friendly for trade, and with the Republicans indicating an unwillingness to back large-scale fiscal stimulus, more monetary easing is on the way.”