UPDATE: The FTSE 100 has risen 66 points to 7,516 following the shock general election result, but the pound has lost further ground against both the dollar and euro.
Sterling was down almost 2% against the dollar before evening out to 1.5% this morning, or $1.2764.
The pound to Euro exchange rate also fell following the news, dipping to €1.13 before increasing slightly to the current €1.14 level.
Dominic Rossi at Fidelity International told the Telegraph: “This is the result markets feared. Markets were wrongly positioned, and international confidence in the UK will suffer. Sterling is the first casualty.”
Pollsters suggested May would receive just 314 seats - 12 short of the 326 needed for a majority.
At the time of writing, while not all of the seats have been called, it has been confirmed that there will be a hung Parliament. The FTSE was anticipated to open higher on the back of the pound’s falling value.
Former Tory chancellor George Osborne said that the election would be “completely catastrophic” for May if the exit poll was correct.
Some have now predicted that the Prime Minister will step down from her role in a conference set to take place outside Number 10 at 10am today.