Euro, stocks surge on French result
london — Europe’s stock markets and the euro surged on Monday after moderate candidate Emmanuel Macron won the first round of France’s presidential election and looked set to triumph in the run-off against far-right candidate Marine Le Pen next month.
Germany’s blue-chip share index, the DAX, hit an all-time as stock markets across Europe and Asia reacted with relief to pro-business French presidential candidate Emmanuel Macron’s first-round success. The index of 30 leading stocks briefly touched 12,398 points, only slightly above the previous record of 12,391 reached in April 2015.
In late morning deals, the Paris market soared more than four per cent, while London was up nearly two per cent and Madrid won three per cent compared with Friday’s closing levels.
The euro shot higher to trade at $1.0869 compared with $1.0726 on Friday.
“European markets are in a buoyant mood... after the French pollsters got it near enough spot on,” said Joshua Mahony, market analyst at IG trading group.
“The move back into risk assets means the chief losers have been the likes of gold and the Japanese yen, with stock markets moving sharply higher.”
Investors globally had been fearful that a wave of populism, which swept Donald Trump to the White House and saw Britain leave the EU, could lead to a win for the antiEuropean Le Pen and put the future of the bloc in doubt.
However, Macron is widely expected to gallop to victory over the divisive Front National leader and traders gave a huge thumbs-up, sending the euro flying above $1.09 at one point.
“Markets are happy to buy what they see as the fact — that 39-yearold Emmanuel Macron will be confirmed as the next president of the French republic in two weeks’ time,” Ray Attrill, head of FX strategy at National Australia Bank, said in a commentary.
The surge in optimism drove down the yen — considered a safe bet in times of uncertainty — which in turn lifted Japanese exporters.
Tokyo’s Nikkei ended up 1.3 per cent, Sydney added 0.3 per cent, Seoul gained 0.4 per cent and Wellington put on 0.4 per cent.
Hong Kong closed 0.4 per cent higher but Shanghai sank 1.4 per cent, extending a recent sell-off fuelled by profit-taking, liquidity concerns and regulatory plans.
The gains in Asia extended Friday’s rally that was built on comments from US Treasury Secretary Steven Mnuchin, who promised that a tax reform plan would be unveiled soon. That was followed by Trump saying that there would be “a big announcement on Wednesday having to do with tax reform”.
The move back into risk assets means the chief losers have been gold and Japanese yen Joshua Mahony, Market analyst at IG trading group
Eyes are now on Washington, where lawmakers have just four days to agree a funding bill to avoid a painful government shutdown that would cost the economy billions of dollars.
There are fears Trump will refuse to sign anything that does not contain spending for his controversial Mexican border wall, with Democrats saying they will not back anything that does include such provisions.