But given the consensus expectation of a huge Tory victory in the popular vote, and of at least modest gains in the government's parliamentary majority, the exit poll numbers are a bit of a nasty shock (currency markets are already showing a drop in the value of the pound) to the conventional wisdom.
Mr Corbyn could attempt to form a government with the smaller parties, which strongly oppose most of Ms May's policies on domestic issues such as public spending cuts.
"A hung parliament is the worst outcome from a market's perspective as it creates another layer of uncertainty ahead of the Brexit negotiations", said Craig Erlam, a market analyst with brokerage Oanda in London.
For context, the 2015 exit pollunderestimated the number of Conservative seats by 15, and overestimatedLabour seats by 7. She became prime minister through a Conservative Party leadership contest when her predecessor, David Cameron, resigned after voters backed leaving the EU. "Our Labour MPs would vote for it and we would call on the other parties to vote for it as well".
Polling stations have opened across Britain in an election to choose a new government.
However, the party is shy of the magic 326 figure for an overall majority in the House of Commons with the poll predicting 314 seats for the Tories.
The exit poll, although a good indicator of broadly how Britons have voted, has not always correctly predicted the exact result in the past.
While both the Conservatives and Labour, led by Jeremy Corbyn, have committed to enacting Brexit, each party has a different vision for how the departure from the European Union should happen.
May's threat to tear up the Human Rights Act drew criticism from Labour leader Jeremy Corbyn.
If all options fail there will be a second election and the country will start the whole process again.
ICM's preliminary findings in a poll for the Guardian put Mrs May's party on 46%, up one point compared with a poll on Monday, with Labour unchanged on 34%.
This is when the real action takes place: the Conservatives, as the largest party, will meet with other parties to see if they can strike a deal.
Asked by ITV if there was any circumstance in which the Lib Dems could prop up the Conservatives, Clegg said: "No". A parliament is elected for a maximum of five years.
Could Labour's Jeremy Corbyn be Prime Minister?
With 97 seats decided, Labour has netted 53 of them and the Conservatives have 31. The LibDems and SNP, who are both more anti-Brexit than Labour, would demand key concessions from Corbyn on European Union membership as conditions for power-sharing. He said no pact, no deal, no coalition.
A make or break situation for May might be reached over the weekend.
Former British finance minister George Osborne said if the exit poll forecasting proves to be correct, it would be "completely catastrophic" for Ms May and the Conservative Party.
Polls suggest Labour has narrowed the Conservatives' lead.
There were signs that Labour's steady advance had been halted and on the eve of polling day the Tories had an average lead of about seven points.
It began with Mrs May stunning Westminster by announcing she was going to the country three years early to obtain a personal mandate for the Brexit talks which begin later this month.