French election spurs equity market, euro rally
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...