French election spurs equity market, euro rally

Mon Apr 24, 2017 4:33pm EDT
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By Chuck Mikolajczak

NEW YORK (Reuters) - Global equity markets rallied on Monday to lift a gauge of world stock indexes to a fresh peak, while the euro briefly jumped to a five-month peak against the U.S. dollar as the first round of an election in France went to the market's preferred contender.

Centrist Emmanuel Macron took a big step towards the French presidency on Sunday by winning the first round of voting and qualifying for a May 7 runoff alongside far-right leader Marine Le Pen.

The victory for the pro-European Union centrist Macron sent MSCI's gauge of stock indexes across the globe .MIWD00000PUS to a record high of 453.70.

The blue chip euro zone STOXX 50 index .STOXX50E surged 4 percent, its best day in nearly two years, while France's CAC40 .FCHI jumped 4.1 percent, its biggest daily percentage gain in almost five years.

Investors were concerned a victory for Le Pen could put France on the path taken by Britain to leave the European Union.

"This alleviates fears that we were going to have to navigate a French exit of the European Union," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

"This is a classic relief rally showing up most in financials," he said. "We cleared this hurdle and now it's a little bit more clear running."

The S&P financial sector climbed 2.2 percent, its best day in almost two months.   Continued...

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., April 20, 2017. REUTERS/Brendan McDermid