The election, which the Conservatives had been widely expected to win comfortably, leaves the party in a weaker position than it had been previously.
May’s Conservative party failed to win enough seats to form a majority in parliament but has gained support from Northern Ireland's Democratic Unionist Party to form a government.
The vote saw the opposition Labour party pick up Conservative parliamentary seats following a campaign that had twice been suspended following terrorist attacks in Manchester and London.
The result was largely seen as a reaction to last year’s divisive referendum on EU membership, with younger voters thought to have helped shore up Labour party support around the country.
Markets have remained muted with further details yet to emerge about the shape of the next government.
Below, several fund managers and industry commentators give their opinions on the election results.
Risk appetite to return?
FE Alpha Manager Richard Buxton (pictured) said headline results may have masked the drivers behind the outcome. He noted support for Labour from younger voters reacting to “soaring student indebtedness and a dysfunctional housing market”, as well as differing views on the EU referendum.
He said: “This was the moment when the young finally found their voice. For those who have never experienced 1970s-style inflation and unfunded giveaways, the message of Jeremy Corbyn’s Labour party proved irresistible.”
Buxton, chief executive and head of UK equities at Old Mutual Global Investors, said weakening economic data had acted as headwinds to domestically-oriented small- and mid-cap markets.
He said: “As such, although there remain pockets of expensively priced small- and mid-cap stocks, when viewed as a whole, the small- and mid-cap markets have been trading at cheaper valuations than their larger peers.”
Buxton added: “With this election now mercifully behind us, and the threat of a cliff-edge ‘no-deal’ Brexit waning, there may just be some cause for optimism that risk appetite will make a return.
“Although a period of uncertainty will not be welcomed by the market, any further signs of a ‘softer’ Brexit, combined with the tailwind of still-improving global demand, could bode surprisingly well for UK companies.”
Renewed uncertainty unhelpful to Brexit negotiations
Jim Leaviss, head of retail fixed interest at M&G Investments, (pictured) said it was an “extremely poor result” for Theresa May personally.
He said: “This renewed uncertainty seems likely to be unhelpful to the UK’s Brexit negotiations, due to start on 19 June. The Conservatives did especially badly in ‘remain’ constituencies.”
Leaviss said the result “partly reflects a rejection of May’s assertion that ‘no deal is better than a bad deal’ and increases the chances of a softer Brexit, or even another referendum on the ‘deal’.”
The fund manager said growth had slowed more recently but there was unlikely to be any immediate policy action by authorities.
He said: “The momentum of UK economic growth has been fading as we move through 2017. Retail sales growth, house prices and inflation-adjusted incomes are all weakening in what remains a very consumption-driven economy.
“This election result and the continued uncertainty it brings suggests that this trend continues. The Bank of England is not going to tighten policy for the foreseeable future – although there is also no likelihood of an ‘emergency rate cut/QE’ of the sort we saw post the Brexit result last June.”
Political uncertainty is nothing new
Paras Anand, chief investment officer – equities, Europe at Fidelity International, said while the result might be considered a negative surprise, investors should focus on the muted reaction of equity, currency and bond markets.
He said: “The first point to stress is that whilst a hung parliament was not the specific outcome that many expected, asset prices in the UK and to a certain extent globally, already discounted a period of extended political uncertainty given the complexity of delivering on the outcome of last year's EU referendum. Simply put, that we are facing a period of political uncertainty is nothing new.
“Second, this uncertainty has led to the UK market looking attractively valued on a longer-term perspective particularly against other global markets and this will also account in part for the absence of reactive selling pressure.
“Our role as bottom-up investors is to focus on the long-term prospects for individual companies rather than make short-term market predictions.”
More ‘pork barrel’ politics
Gervais Williams, senior executive director and fund manager at Miton (pictured), said the result had a number of ramifications for the UK political scene. 
He said: “The move back towards two party politics means a marked reduction in the risk of a UK break up. The general political shift to the left within both mainstream parties spells less austerity.
“We’ll see more ‘pork barrel’ politics with special interests of the Democratic Unionist Party of Northern Ireland (DUP) becoming dominant. The geography of Ireland points to a soft Brexit.”
While the media focus was likely to remain on Brexit negotiations, Williams said overseas issues were likely to pose more significant challenges for markets.
He noted eurozone tensions, a ‘Trump shock’, Middle East violence and a hard landing for the Chinese economies as challenging.
He added: “We don’t expect another UK election for quite some time because Conservative MPs will be keen to get electoral boundary changes through before they risk another.”
Richard Colwell, head of UK equities at Columbia Threadneedle Investments, said while the result was not what investors were expecting, it should be remembered that initial market reaction to the referendum and US election had been short-lived.
He said: “A number of stocks that could be vulnerable under a more interventionist government have been weak for some time (e.g. transport and utilities), so this isn’t coming from a clear blue sky.
“Any sell-off in media and leisure stocks could prompt takeovers. However, if pressure on sterling continues and the currency returns to the lower end of its recent trading range, dollar earnings for multi-nationals listed in the UK will be boosted.
“Remember the UK stock market is much less reliant on the domestic economy than in previous cycles.”
He added: “In addition, the UK market has been out of favour with international investors for some time.
“Asset allocation to UK equities is already as low as it was in 2008 at the height of the banking crisis, so there is no sense of hot money leaving the market. The valuation gap with other equity markets, notably the US but also Europe, is as pronounced as it’s been for a decade on several metrics.”
Usually best to let the dust settle
Jason Hollands, managing director of investment management group Tilney, said one area for greater attention would be domestically-focused, smaller companies. 
He said: "The key space to watch for market reaction will be the more domestically orientated companies which are typically found within in the FTSE 250 and smaller end of the market.
“These bore the brunt of negative reaction in the initial aftermath of the Brexit referendum and there could be renewed anxiety though this may be tempered by the reduced threat of corporation tax rises implied by the result.
“While the currency translation impact of a weaker sterling benefits large companies with international earnings, many UK domestically focused businesses rely on imports of raw materials the costs of which will rise if sterling weakens further.”
Hollands said the UK economy faced a number of near-term headwinds with inflation running ahead of wage growth, putting pressure on consumer spending.
He added: “As we saw in the immediate aftermath of the EU referendum, it is usually best to let the dust settle on the initial market reactions to political events such as this rather than act hastily.
“So, for now, the best course of action is probably to sit tight and assume the brace position as some potentially volatile days are ahead for markets as well as UK politics."