Provisional results in Germany’s election confirm that mainstream conservatives led by Friedrich Merz won Germany's national election, while a far-right party surged to become the nation’s second-largest.

German stocks rallied on Monday and the euro reached a one-month high after Germany’s election result put centrist parties on track to form a coalition.

Exit polls show the center-right Christian Democratic Union party leading, with the AfD party heading towards the strongest showing of the far-right since World War II.