The rise was the second biggest of the year, with the election result triggering a surge in shares for energy firms, banks, and housebuilders.
The Ftse rose 160 points to 7046.8 as Prime Minister David Cameron’s majority ended fears that markets would be dogged by weeks of political uncertainty.
The result also boosted sterling, with the pound climbing to its highest level against the US dollar since late February before settling up two cents at $1.54. It was three cents stronger against the euro at just under €1.38.
British Gas owner Centrica jumped 8% or 20.8p to 278.2p after Labour’s defeat ended the prospect of an energy price freeze and tighter regulation. SSE was 5% or 83p higher at 1647p.
Housebuilders also performed strongly on the back of the result. Persimmon was up almost 6% or 93p to 1746p and Barratt Developments added 36.5p to 549.5p.
Estate agents surged as Labour’s defeat spelled the end for the prospect of a mansion tax, with London-focused Foxtons up 9% or 20.5p to 248.5p and Countrywide, the owner of Hamptons and Gascoigne-Pees, up 20.5p to 553.5p.
State-backed banks rose on hopes the eventual sell-off of the taxpayer stake remains on course. The sector was boosted by the threat of an increase in the banking levy and a bonus tax, under Labour, being removed.
State-backed Lloyds Banking Group jumped almost 6% or 4.7p to 86.9p and Royal Bank of Scotland improved 20.3p to 352.4p.
Retailers could have faced an end to zero-hours contracts and a push for a “living wage” under Ed Miliband but headed higher yesterday, with Sports Direct International up almost 5% or 29p to 654p.
Betting firms, which were also seen as potential targets for more regulation on new shop openings, rallied with Ladbrokes up 10% or 10.5p to 116.1p and William Hill 21.5p higher at 395.9p.
A potential review by Labour of the rail franchise system, which could have produced uncertainty for transport operators, was avoided and meant Stagecoach lifted 24.7p to 398.3p and FirstGroup added 6.1p to 109.2p.
The biggest risers on the Ftse 100 were Babcock International up 93p at 1083p, Centrica up 20.8p at 278.2p, St. James’s Place up 65p at 962.5p and Barratt Developments up 36.5p at 549.5p
The only two fallers were Glencore was down 0.75p at 302.6p and Randgold Resources down 11p at 4764p.