The poll forecast the Scottish National Party (SNP) would win 34 seats, the center-left Liberal Democrats 14, the Welsh nationalist party Plaid Cymru three and the Greens one.
May's statement on working with the Democratic Unionist Party (DUP) followed a meeting with Queen Elizabeth II at Buckingham Palace, where she asked the monarch for permission to form a new government.
British voters headed to the polls after May had called for general elections in April.
The early election was meant to strengthen the British Conservative Party's hand in the lead-up to Brexit negotiations, but it has backfired spectacularly.
To retain her role as Prime Minister, May moved quickly announcing her intention to pursue a partnership with the DUP, a small party from Northern Ireland known for pursuing a more socially conservative agenda than the Tories.
"For the economy, households and corporates will be concerned by the increased political uncertainty", said Azad Zangana, senior European Economist at fund manager Schroders in London. On Friday, May said her party would "provide stability" for the country whatever the election outcome.
Her campaign unraveled after a policy U-turn on care for the elderly, while Corbyn's old-school socialist platform and more impassioned campaigning style won wider support than anyone had foreseen, notably from young voters, say analysts.
Global energy demand stumbles for third year -BP
Bob Dudley commented: "While welcome, it is not yet clear how much of this break from the past is structural and will persist". The latest report from BP detailing the global energy consumption for 2016 has shown how the black rock is on the decline.
The shock defeat for Conservatives - despite the pre- poll projections of a comfortable majority - was seen by the British media as a "humiliation" for May to continue in her position. But Corbyn's party won many new seats Thursday.
When May called the election seven weeks ago, she was seeking to capitalize on opinion polls showing that her Conservatives had a wide lead over the opposition Labour Party. I can not imagine a situation in which the DUP will have any influence on the Conservative Party or the Government's policies on equality. Former leader Nick Clegg, a former Deputy Prime Minister, lost his Sheffield Hallam seat.
National security was also a major issue of the election campaign following recent and deadly terror attacks in the country.
But that is far from the victory sought - and there are already questions about whether the British electorate were rejecting May's "hard Brexit" approach to leave the European Union whatever deals were made over the divorce.
Oettinger said that "time for Brexit negotiations is getting tight" and added that "they must be closed in October 2018" to allow for the complicated approval process in the member states to run its course ahead of the official two-year deadline.
Instead, her election gamble has failed and she and her Conservative party have been weakened, with many today questioning May's future as prime minister.