Stock markets across Europe surge as Theresa May heads for No10

STOCK markets across Europe surged today as Theresa May prepared to take the keys to No10.

The pound also rallied after Andrea Leadsom dramatically quit the race to Downing Street following her comments about motherhood.

Nerves in the markets were eased by the prospect of smoother negotiations between Remain campaigner Mrs May and EU leaders and the disappearance of a summer leadership contest.

The first spike took off when rumours started to circulate that the energy minister was about to step down.

And then at 12.15pm as she made the dramatic announcement, markets surged again as it became clear Theresa May would become the next PM.

The FTSE100 index continued to rise in the aftermath of Mrs Leadsom's announcement. It closed today up 92 points to one of its highest levels this year at 6682, a gain of 1.2 per cent.

It means the blue-chip index for the largest firms listed on the London stock markets has risen by more than 20 per cent since February 11 when global investors were fretting about China's economic slow down.

The FTSE250, a better indicator of the domestic market, also continued to surge today, rising by almost 530 points -  two per cent - still below its pre-referendum levels.

European markets also enjoyed an upsurge with the German DAX up two per cent and the French CAC 40 rising by 1.75 per cent.

Meanwhile sterling briefly bounced to above $1.30 before falling back just below.

Uncertainty has seen the value of the pound against the dollar tumble to its lowest level for 31 years. On the night of the referendum the pound was worth $1.50 and 1.31 euros.

Now Brits will be hoping Mrs May’s leadership will ease nerves in the currency markets and see the pound gain back some ground.

Traders in the City said with Mrs May at the helm it would ease political turmoil and provide some relief for the pound, which has been hammered since the Brexit vote.

"There is a bit more political clarity which is giving sterling a bit of a boost," said John Hardy, head of currency strategy at Saxo Bank.

However, he added: "We should see a fair bit of resistance around the $1.30 area."