The pound tumbled as Britain faces a hung parliament and an unclear course in its approach to exit the European Union.
UK stocks rallied the most among developed markets, while other assets largely shook off the election results.
Sterling dropped the most since October as the ruling Conservative Party was on course to fall short of the seats needed for an overall majority.
The FTSE 100 Index jumped the most since April. The impact was muted elsewhere, as volatility measures in Asia retreated.
Futures on the SandP 500 Index advanced along with equities from South Korea to Singapore. Gold dropped for a third day. "Even though we're seeing higher sterling volatility, there's even less prospect of that spilling into broader markets," Ray Attrill, head of foreign exchange strategy at National Australia Bank. in Sydney, told Bloomberg.
“This is still a little local difficulty rather than an event of global proportions.” Another spasm of political turmoil in Britain comes less than a year after the country voted to leave the European Union.
Theresa May’s future as prime minister was thrown into doubt after her gamble to call an early election backfired just 10 days before Brexit negotiations are due to start.
"We've had some pretty benign reaction so far," John Woods, chief investment officer for the Asia Pacific at Credit Suisse Group AG, told Bloomberg TV. "A hard Brexit now is yesterday's story."
The election results cap a series of major events that riveted investors all week. But just as traders shrugged off the UK vote, they also weren’t fazed by the European Central Bank’s policy decision or testimony from former FBI Director James Comey.
ECB President Mario Draghi said the euro region still isn't generating enough inflation, overshadowing improved prospects for the economy that led officials to upgrade their growth assessment.
In Washington, Comey and Donald Trump accused each other of lying about their private encounters in the wake of dramatic Senate testimony that centred on whether the president sought to quash part of a federal probe into Russian meddling in the 2016 election.
The yen retreated 0.4 per cent to 110.42 per dollar. The euro slipped 0.2 per cent to $1.1193. The Bloomberg Dollar Spot Index added 0.4 per cent, gaining for a third day.
The Stoxx Europe 600 Index climbed 0.3 per cent. Japan's Topix index rose 0.1 per cent while the Nikkei 225 Stock Average jumped 0.5 per cent.
SoftBank Group rallied 7.4 per cent to the highest in 17 years after agreeing to buy Boston Dynamics from Google parent Alphabet.
South Korea's Kospi index climbed 0.8 per cent and Singapore's Straits Times Index added 0.5 per cent. Hong Kong's Hang Seng fell 0.2 per cent, the Hang Seng China Enterprises Index lost 0.6 per cent and the Shanghai Composite added 0.3 per cent.
Data showed China’s producer price gains moderated following further easing in commodity prices.
The yield on 10-year treasuries rose one basis point to 2.20 per cent. UK gilt yields rose two basis points to 1.06 per cent, after climbing three basis points on Thursday.
German bund yields were flat at 0.25 per cent. French 10-year yields dropped one basis point.
Oil lost 0.4 per cent to $45.51 a barrel. Crude is down 4.7 per cent for the week as an unexpected increase in US crude stockpiles cast doubt on OPEC’s ability to rebalance world crude markets.
Gold fell 0.5 per cent to $1,271.88 an ounce, sending it toward a three-day decline of 1.7 per cent.
-Bloomberg
