FTSE rises strongly
Markets lifted as French voters reject far left
Markets were boosted today after their favoured candidate made it through to the final round of the French presidential election.
The FTSE 100 rose more than 130 points (2%) after centrist Emmanuel Macron and far-right leader Marine Le Pen won through to the run-off on 7 May. The vote reduced the risk of France pulling out of the euro and the EU.
The currency briefly leapt to five-month peaks and equities are expected to rise. The euro was off its highest overnight levels, but at 7am remained up by more than 1.2% to trade at 1.0863 against the dollar. US stock markets also gained.
Shares in French banks were strongly higher in the wake of Mr Macron’s first round win. Societe Generale and Credit Agricole are both more than 10% higher, while BNP Paribas is up about 9%.
The CAC index in Paris rose more than 4% and the Dax in Frankfurt also benefited, adding about 2%.
Investors had feared for the single currency’s future if one of the far-left candidates had secured a first round victory.
Mr Macron, a former banker, is now favourite to secure the presidency. He wants to negotiate closer links between France and Britain after it leaves the EU.
It is the first time in 60 years that neither of France’s main left-wing or right-wing parties has had a candidate in the second round.
With 97% of votes counted, Mr Macron is on 23.9% with Ms Le Pen on 21.4%.
German Chancellor Angela Merkel’s spokesman, Steffan Seibert, tweeted: “It’s good that Emmanuel Macron was successful with his course for a strong EU and social market economy. All the best for the next two weeks.”
European Commission President Jean-Claude Juncker also congratulated him.
EU foreign policy chief Federica Mogherini tweeted: “The result is the hope and future of our generation.”
Mr Macron is seen as pro-business. He wants to make it easier for companies to hire and fire staff, lower taxes on businesses and extend the 35-hour week.
The London Stock Exchange also rose on new data showing the strongest export orders from British factories in six years in early 2017, helped by sterling’s fall after the Brexit vote.
The CBI’s quarterly measure of manufacturing showed a boost in demand for domestic products.
However, the weak pound is also pushing up prices and unit costs rose at their strongest rate over the same period.