The blue chip FTSE 100 <.FTSE> index closed 2.1 percent higher at to 7,246.68 points, its biggest one-day jump since early September 2016 and outpacing the mid caps <.FTMC> which closed up 1.3 percent at a new record closing level.

Macron won the first round of voting, qualifying for a run-off alongside protectionist, eurosceptic Marine Le Pen. Polls pointed to Macron easily beating Le Pen in the run-off on May 7, calming market fears in light of the UK's Brexit vote and Donald's Trump's election in the United States.

"It's the pro-growth backdrop that we're now starting to see come through rather than ... ongoing austerity which is providing quite a significant shift with the outlook for the European banks, in particular with the French banks very much leading the way, which of course sees their UK-listed counterparts rally quite significantly today as well," Charles Hanover Investments partner, Dafydd Davies, said.

UK banks <.FTNMX8350> jumped 3.1 percent, joining in with a broader risk-on rally among European lenders <.SX7P>, which surged 4.8 percent. Shares in Barclays (>> Barclays PLC) rose 5.4 percent, while Standard Chartered (>> Standard Chartered PLC) was up 4.8 percent and Royal Bank of Scotland (>> Royal Bank of Scotland Group plc) gained 2.8 percent.

Macron still needs to clinch the presidency and win a stable majority in legislative elections in June.

"The reforms Mr Macron is proposing are positive but the question is whether he will have the parliamentary legitimacy to implement these," Barclays European economist, Francois Cabau, said.

"How much of it supports growth over the long term is still very much a question to which we won't have the answer until the 18th of June, and potentially afterwards."

Among individual stock movers, energy provider Centrica (>> Centrica PLC) was the biggest FTSE faller, down 3.5 percent, while sector peer SSE (>> SSE PLC) dropped 1.9 percent after Prime Minister Theresa May's Conservative Party vowed to cap domestic prices if it retains power in an election in June.

Precious metals miner Randgold Resources (>> Randgold Resources Limited) was among a handful of stocks in negative territory, down 1.4 percent as investors rotated out of more defensive safe-haven stocks.

Blue chips aside, shares in Kennedy Wilson Europe Real Estate (KWE) (>> Kennedy Wilson Europe Real Estate PLC) jumped 14.1 percent after U.S. parent company Kennedy Wilson (>> Kennedy-Wilson Holdings Inc) said it would buy back KWE in an all-share transaction with a combined enterprise value of $8.2 billion.

Computacenter (>> Computacenter plc) gained 7.6 percent after an upbeat outlook.

Small-cap shoe retailer Jimmy Choo (>> Jimmy Choo PLC) gained 9.9 percent after it put itself up for sale.

(Editing by Louise Ireland)

By Kit Rees and Helen Reid