EUROPE MARKETS: French Stocks Head For 2-year High After Macron Win Eases 'Frexit' Fears
24 April 2017 - 09:47AM
Dow Jones News
By Sara Sjolin, MarketWatch
Bank shares jump in Europe after French election
French stocks rallied on Monday after centrist Emmanuel Macron
won the first round of voting in the French presidential election,
easing fears that two anti-European Union candidates would be in
the final runoff.
The CAC 40 index climbed 3.7% to 5,247.45, setting it on track
for its biggest one-day percentage gain since August 2015. If the
French benchmark ends Monday at that level, it'll mark the
strongest close since April 2015, according to FactSet data.
Other European markets also welcomed the French election result,
with the Stoxx Europe 600 jumping 1.8% to 384.80.
The U.K.'s FTSE 100 index climbed 1.4% to 7,214.04, while
Germany's DAX 30 index added 2.4% to 12,336.83.
The upbeat mood came after centrist Macron and far-right
candidate Marine Le Pen came in first and second in France's
presidential election on Sunday, qualifying for the second round on
May 7.
Read:4 things investors need to know about France's presidential
runoff
(http://www.marketwatch.com/story/4-things-investors-need-to-know-about-frances-presidential-runoff-2017-04-23)
Investors had feared two euroskeptics -- Le Pen and far-left
politician Jean Luc Melenchon -- would make it to the runoff vote,
as opinion polls had been showing an extremely tight race. Both
candidates had promised to put France's EU membership up for a
referendum, sparking fears of a so-called Frexit.
Macron is now leading the polls for the runoff vote, setting him
on course to become France's next president.
On Monday, the yield in 10-year French government bonds dropped
9 basis points to 0.792%.
"Investors who seek to benefit from today's news in
company-related markets need to focus on equities, where the
performance potential over the coming days is clearly higher, as
stock markets did not react much to recent robust macro data,"
analysts at UniCredit said in a note.
"Investors were too reluctant to take corresponding risks ahead
of the elections. French banks, alongside European banks in
general, will likely be the biggest winners," they added.
The Stoxx Europe 600 banks index rallied 3.6%, led by French
lenders. Shares of Credit Agricole SA (ACA.FR) soared 10%, BNP
Paribas SA (BNP.FR) jumped 8.1%, and Société Générale SA (GLE.FR)
rallied 9.2%.
In other countries, shares of UniCredit SpA (UCG.MI) rose 9% in
Milan, while Commerzbank AG (CBK.XE) added 8.1% in Frankfurt.
The euro also jumped on the French election result, buying
$1.0834, up from $1.0727 late Friday in New York. That was the
highest trading level for the shared currency
(http://www.marketwatch.com/story/euro-jumps-to-5-month-high-in-french-election-relief-rally-2017-04-24)
since November.
(END) Dow Jones Newswires
April 24, 2017 03:32 ET (07:32 GMT)
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