Home builders and banks in the U.K. rallied on Friday in relief at a commanding Conservative victory in the general election.

Equity strategists at Citi said the U.K. election result “is probably as good as it gets.” While Conservatives had led in polls since the election was called, it wasn’t clear beforehand that they would win a majority in Parliament. Read more about the election.

The FTSE 250 MCX, +3.53%  climbed 3.4% to 21507.50. Investment managers, real estate investment trusts and home builders led the way as investors flocked to stocks more exposed to the domestic economy. Double-digit gainers included lender Virgin Money UK VMUK, +19.45%, bus operator Stagecoach Group SGC, +12.93%   and real-estate agent Savills SVS, +13.00%  .

Goldman Sachs strategists reiterated a call on Friday to go long U.K. domestic stocks, particularly homebuilders and domestic banks. “Clarity on the UK’s terms of exit from the EU should unlock pent-up business investment; the reversal of a decade of fiscal consolidation should provide a fillip to domestic demand; and a pick-up in global growth should underpin a recovery in net exports,” said analysts Zach Pandl, Sharon Bell and George Cole.

The large-cap FTSE 100 UKX, +1.48%  also gained ground, rallying 1.5% to 7382.19.

The surge in the pound GBPUSD, +1.2382%  was a drag from companies that generate most of their revenue outside the U.K., such as pharmaceutical GlaxoSmithKline GSK, -0.75%  and beverage maker Diageo DGE, -0.18%  . However, news that the U.S. and China are on the verge of signing a trade agreement boosted stocks worldwide.

Large-cap advancers included home builders Persimmon PSN, +11.77%, Taylor Wimpey TW, +14.59%, Berkeley Group BKG, +13.19%  and Barratt Developments BDEV, +13.17%. U.K. banks Royal Bank of Scotland RBS, +10.07%  and Lloyds Banking Group LLOY, +6.36%  also surged.