She needs to strengthen her hand in "divorce talks" with the European Union by shoring up support for her Brexit plan.
Investors were digesting news of the snap election, as Downing Street had previously denied plans for a poll before 2020.
Investors were reacting to Mrs May's plans to hold a general election on June 8, which will face a House of Commons vote this afternoon.
"Our opponents believe that because the Government's majority is so small, our resolve will weaken and that they can force us to change course", she said. "They underestimate our determination to get the job done and I am not prepared to let them endanger the security of millions of working people across the country".
Under the terms of the Fixed-Term Parliaments Act, Mrs May must secure a two-thirds majority of MPs to bring the election forward by three years from the scheduled date of May 2020.
The Queen was given advanced warning of the early General Election on Monday after the Prime Minister telephoned her to inform the monarch of the news. "If the prime minister won't attend - empty chair her".
Cynics (myself included) point out that the Conservative Party now ejoys a 20% lead over the opposition Labour Party which finds itself in disarray under a leader regarded as weak by the public and many of his own MPs.
That would make it easier for her to ignore opposition calls for a softer European Union exit - making compromises to retain some benefits of membership - and to face down hard-liners within her own party who want a no-compromise "hard Brexit" that many economists fear could be devastating.
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The call for a snap election came as a shock.
THE pound surged to a two-and-a-half month high, while the FTSE 100 slumped to a nine-week low after prime minister Theresa May announced a general election would take place on June 8.
And Lib Dem leader Tim Farron said the live events should go ahead without the Prime Minister.
Brexit - the theme which has been at the centre of political argument since David Cameron launched last year's referendum - will again be at the forefront of debate in the coming weeks. He said Tuesday that Labour's election platform in June would be for a more equal society and economy, and "a Brexit that works for all". Two-fifths of games companies based in the United Kingdom are considering relocating out of the country in the wake of Brexit, a survey has found.
"In the background, we still have other issues such as North Korea, which could weigh on risk sentiment, as well as the French election", he said.
"Because Brexit isn't just about the letter that says we want to leave, it's about negotiating the deal, about getting the right deal from Europe".
The pound surged 0.7 percent against the dollar to $1.2658, recovering from a 0.4 percent drop an hour earlier as rumors swirled about the surprise statement.
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