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* FTSE 100 up 1.8%, FTSE 250 jumps 4.2%
* Utilities, banks and retailers top risers
* Utilities soar as Corbyn steps down as Labour leader
* National Grid, United Utilities up 5%
* RBS, Lloyds jump more than 10%
(Adds graphics, comments)
By Thyagaraju Adinarayan and Julien Ponthus
LONDON, Dec 13 (Reuters) - UK shares exposed to the domestic
economy surged on Friday after Prime Minister Boris Johnson's
Conservative Party won a solid majority, assuring markets that
Britain is likely to be heading for an orderly exit from the
European Union.
The export-heavy FTSE 100 index rose 1.8% as a rally
in utilities, retailers, housebuilders and banking stocks offset
the drag from sterling, which surged to 19-month high versus the
dollar.
Housebuilders soared 10% with Taylor Wimpey,
Persimmon and Berkeley reaching record highs
and topping the blue-chip index.
The FTSE 250 index, home to many companies with high
UK exposure, surged as much as 5.2% to record highs.
Stocks were benefiting from the Conservative victory and
reports of a preliminary trade deal between China and the United
States, said Emmanuel Cau, head of European equity strategy at
Barclays.
"The banking sector, real estate, construction, utilities,
all these sectors are expected to benefit from the 'feel-good'
factor".
Johnson's win also lifted nationalistion fears hanging over
utility stocks, boosting National Grid and United
Utilities, both of which rose more than 7%. Labour leader
Jeremy Corbyn had announced plans to nationalise utilities in
his election manifesto.
Corbyn said he on Friday he would step down as Labour leader
. The change in Labour's leadership is likely to be
the biggest factor driving banks and utilities higher, by
affirming nationalisation is now "off the table", Citi analyst
Andrew Coombs said.
Among financials, RBS, Virgin Money and
Lloyds stood out rising 10% to 16%.
JPMorgan's basket of London-listed companies
that make their cash at home rose 7% on Friday to record highs.
"I think there has been a huge 'underweight' on UK assets
and we are seeing it unwind ... UK domestics are attractively
priced and there is more way to go", said Kasper Elmgreen, head
of equities at asset manager Amundi.
(Reporting by Thyagaraju Adinarayan and Julien Ponthus,
additional reporting by Sruthi Shankar)
