A vendor hands out copies of the London Evening Standard newspaper on 14 December 2019, with the front page reporting on the election victory of Prime Minister Boris Johnson's Conservative Party in the general election. (AFP)

London stocks and the British pound jumped Friday after an election triumph for Conservative Prime Minister Boris Johnson that analysts said will bring clarity to Brexit proceedings and unlock stronger economic growth.

Other European stock markets — although lagging buoyant London, which rose over two percent at one point — also powered ahead, supported by confirmation of a partial trade deal between the United States and China.

However, Wall Street’s rally petered out, with American equities finishing little changed on the day both Beijing and Washington finally said they were on the same page.

Stocks had rallied Thursday in anticipation of the trade deal with China, but then declined when the pact was announced.

“You got a pretty good example of ‘buy the rumors and sell the news,'” Art Hogan of National Holdings told AFP, referencing the saying indicating equities rise more in anticipation of an event than after the event itself.

“But it’s certainly great news on Brexit and US-China trade war.”

Trade economists cheered the fact the deal pulled back from the brink but did not see much progress after many months of pain for American businesses and farmers.

President Donald Trump has canceled tariffs that had been due to hit $160 billion in Chinese goods as of Sunday and agreed to reduce some tariffs already in place.

China also committed to purchases of US manufactured merchandise, energy goods and farm exports, US officials said, adding that the text of the agreement should be signed in early January.

In Britain, Prime Minister Johnson will now push ahead with Britain’s scheduled exit from the European Union on 31 January as he seeks to dispel three years of uncertainty and political deadlock, with a post-Brexit, probably expansionary, budget planned in March.

“The UK general election has provided a clearer path towards a resolution to Brexit and looser fiscal policy, which should boost economic activity and push up sterling, UK equities, and Gilt yields,” said Hubert de Barochez, an economist with Capital Economics.

But he warned that “as long as there remains the possibility of something like a ‘no deal,’ those gains ought to be limited.”

European leaders also welcomed what appeared to be an end to Brexit paralysis, but warned Britain against becoming “unfair competitor.”

The sheer scale of Thursday’s victory — the biggest Conservative majority since Margaret Thatcher’s heyday in the 1980s — sent the pound soaring to an 18-month dollar peak and to highs against the euro not seen since the June 2016 Brexit referendum.

The pound held at elevated levels on Friday but pulled back somewhat from the multi-month peaks forged overnight.

The broader FTSE 250 index, which is more weighted with domestic companies than the FTSE 100 which is dominated by multinationals, surged to a record high.

Investors expressed relief that Johnson roundly defeated main opposition leader Jeremy Corbyn’s Labour Party — which had vowed to re-nationalize formerly state-owned companies.