We suspect markets will interpret this general election result as a rejection of Mrs May's tough stance in the upcoming negotiations with the European Union...and consequently view a "soft Brexit" as more likely.
London's top flight index ended the day up by more than 1% or 77.35 points at 7,527.33 as investors digested news that Theresa May's Conservatives had fallen short of an overall Commons majority, resulting in a hung parliament.
"What the country needs more than ever is certainty", she said.
"The results of the United Kingdom election indicate to me that there is no strong mandate to proceed with a hard Brexit, which represents an opportunity for Ireland".
Speaking in Mexico, Mrs Merkel told a news conference: "We are ready for the negotiations".
Earlier, Arlene Foster, the leader of Northern Ireland's Democratic Unionists (DUP), confirmed she would be meeting Mrs May in Downing Street on Tuesday with a view to finalising a deal to prop up a minority Tory government.
"At the same time, we say that we want to remain a good partner to Britain". But Thursday's elections weakened her power as the country prepares to negotiate its exit from the European Union.More news: Sturgeon appeals for tactical votes to stop Tory gains
Meanwhile, Michael Fuchs, senior economic adviser to the German chancellor, told the BBC the result meant it was time for Mrs May "to face realities" and soften her approach. Bohuslav Sobotka said that too much time had already been wasted. "I have the feeling, because otherwise they would have given her a better vote". According to schedule, the negotiations begins on June 19. Some parliamentarians in both the Conservative and Labour parties want to remain in the EU.
Guy Verhofstadt, President of the Alliance of Liberals and Democrats for Europe and a member of the EU's Brexit negotiating team, made no secret of his hopes ahead of the election, tweeting a picture of European Union and British unity.
"We will wait for the results of these elections but meetings (on Brexit) are going to begin and we are going to defend the interests of the 27 countries which will be in the European Union in the future", Merkel said on Friday.
Donald Tusk, president of the European Commission, urged the May government to get on with negotiations, noting that the United Kingdom has less than two years to extricate itself from the EU - which is considered a gargantuan task. "But not quite the Brexit election we expected", said Rob Ford, political science professor at Manchester University.
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"Our shared responsibility and urgent task now is to conduct the negotiations.in the best possible spirit, securing the least disruptive outcome", said Tusk.