The FTSE 100 has enjoyed its biggest one-day rally since September as markets surged following the first round of voting in France's presidential election
London's leading share index rose by 2.11%, or 150 points, adding £38bn to the value of its constituent companies.
France's Cac 40 lifted by an even stronger 4% while in Germany. the Dax added more than 3% to take it to an all-time high.
Banking stocks were among the main risers after centrist Emmanuel Macron's victory appeared to place him in pole position for victory in the final run-off against Front Nationale leader Marine Le Pen (Other OTC: PENC - news) .
In currency markets, the euro hit five-month highs and the pound was nearly two cents lower against it at just under €1.18.
It reflected an erosion of concern for a possible capital flight in the event of an election win for Ms Le Pen, who wants the country out of the euro.
Forecasts suggest 39-year old Mr Macron has a comfortable lead in the polls ahead of the final round of voting.
The results of the first round were largely in line with polling - a factor which helped calm market jitters on Monday as analysts had warned that any sniff of a win for Ms Le Pen could have seen the euro reach parity with the dollar.
:: Macron odds on to be next President
Jasper Lawler, senior market analyst at LCG, said the result "sent markets into ecstasy" as they wrote off the threat of a Le Pen victory.
He said: "Macron as President is not a done deal yet with the final result not known until May 5 but the way markets are reacting, it may as well be.
"Markets are feeling a lot more confident in the polls showing an easy win for Macron in the second round."
He said banks were the obvious winners from a more certain economic outlook with Macron in charge.
Other market participants were more wary, suggesting that some element of caution would remain priced-in because Ms Le Pen was still in the race and neither politician had held high elected office.
Senior (Other OTC: SNIRF - news) market analyst at ETX Capital, Neil Wilson, said: "While markets may overall take this result as net positive, we have in the final round two candidates with no experience and no real say over the deputies.
"Governing France could become even harder than usual and that will mean any initial relief will need to be tempered by a tough reality.
"A couple of years into a Macron presidency will be a better time to discuss the real impact of this result. For now the market - vis-a-vis the euro - disaster has been averted."