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FTSE jumps as new government is announced

UK-listed share prices have risen on the news that a coalition government has been established between the Conservatives and the Liberal Democrats.

The FTSE 100 index was up 24.51 points, or 0.46 per cent, at 13.30 BST.

It recovered from opening falls as banks led the gains, buoyed by the appointment of a new cabinet.

Conservative leader David Cameron was announced as the new prime minister last night (May 11th), with Liberal Democrat leader Nick Clegg acting as his deputy.

A number of other senior Liberal Democrats will hold front bench posts alongside the Tories.

Commenting on the share price movements, Sam Wright, a trader at Spreadex, told Reuters he was surprised the gains were not larger.

"It seems investors' relief on the resolution of the political situation in the UK remains offset by nerves over the eurozone debt crisis," he remarked.

Travel companies also fared well in the FTSE 100 following a turbulent period caused by the volcanic ash cloud.
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