Global shares surge on French poll results
World stocks surged to an all-time record high after centrist and market favourite Emmanuel Macron won the first round of the French election, igniting a risk-on rally.
Investors breathed a collective sigh of relief as markets quickly began to price in the prospect of a Macron presidency, who qualified for a May 7 runoff alongside far-right anti-EU candidate Marine Le Pen.
The MSCI All-Country World Index, a gauge of global stocks, jumped 1.5 per cent — surpassing its previous lifetime high set last month. France’s blue chip index, the CAC 40, surged to its highest level in more than nine years, up 4.1 per cent on the day to 5268.85. Meanwhile, the German DAX set a new record high of 12,454.98 and the Euro Stoxx 600 jumped 2.1 per cent to 386.09, a 20-month peak.
In the UK, the FTSE 100 enjoyed its biggest daily rise since September last year, rallying 150.13 points, or 2.11 per cent, to 7264.68.
Worries about a potential anti-estab- lishment shock had plagued market sentiment in the build up to the election.
However, polls showed pro-EU Macron is expected to beat Le Pen in the second round, easing fears of a breakup of the eurozone.
Credit Suisse analyst Andrew Garthwaite said Macron is “a good choice” for both the French economy and financial markets.
“Macron’s policies are clearly pro-Europe, and as Economy Minister he implemented reasonable reforms to improve the competitiveness of French companies and liberalise the economy,” he added.
On Wall Street, US stocks joined the rally, with the Nasdaq touching a new record high and the Dow Jones posting triple digit gains.
Neil Wilson, of ETX Capital, said: “Banks are doing well because there is now no major risk of significant outflows from the European banking system.”
Meanwhile, Europe’s fear gauge, the Euro Stoxx 50 Volatility index, fell 8.8 points, wiping out gains made earlier this month.