The Christian Democratic Union and its allied Christian Social Union secured the largest share of votes in the German federal election, exit polls show.

The margin of error for individual polls is estimated from the poll’s sample size and the number of eligible German voters reported by the German Federal Statistical Office.

Polls are open across Germany as the world’s third largest economy chooses a new leader to guide it through an era of febrile immigration debates and souring relations with Washington.

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.

European shares were largely unchanged on Monday, while Germany's benchmark index rose as investors greeted the widely expected victory of Friedrich Merz-led opposition conservatives at the national election.

But the biggest relief is that the center-left SPD won enough seats in the Bundestag to be able to form a two-party governing coalition with the conservative CDU.