Analysts at investment group BlackRock have warned investors not to get carried away ahead of the second round of voting, in two weekend’s time.
Business-friendly and pro-European Macron, who has maintained a large winning margin in head-tohead polls with Le Pen, can now build on his momentum.
Other candidates on both the left and right said they would vote for Macron while issuing strong statements against the National Front. We see markets pricing in some remaining political risk, given the potential for surprises in the next two weeks. Any significant shift toward Le Pen in the polls could dampen investor sentiment due to her anti-euro stance.
But right now, the CAC 40 index of leading French shares is sitting proudly at a two-year high:
France’s stock market is tipped to rocket this morning, quite possibly by more than 4%.
That’s because the ‘nightmare scenario’ of Marine Le Pen becoming French president appears to have been squashed, says Neil Wilson of ETX Capital:
With pollsters and analysts giving the FN candidate virtually no chance in the second round against Macron, those really big worries that many had coming into this election – the risk of ‘Frexit’ and a breakup of the Eurozone – have definitely subsided. But they have not vanished.
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A wave of relief is sweeping through the markets this morning, pushing the euro up and triggering a wave of buying.
The first round of the French election delivered the result that most investors were hoping for, calming fears that the eurozone faced another threat to its existence.
In a massive snub to the established parties, the presidency will be contested between centrist Emmanuel Macron and National Front leader Marine Le Pen. And there’s a widespread expectation that Macron is ready to march into the Élysée Palace.
The euro spiked to a five-month high over $1.09 when the polls closed last night, and forecasters correctly predicted that Macron had won first place.
Most of the defeated candidates have already thrown their support behind Macron, and he is heavily odd-on to become the next French president.
If you missed last night’s excitement, let our Paris correspondent Angelique Chrisafis explain:
The independent centrist Emmanuel Macron has topped the first round of the French presidential election and according to projections will face the far-right Front National’s Marine Le Pen in a standoff marked by anti-establishment angerthat knocked France’s traditional political parties out of the race.
Macron topped Sunday’s first round with 23.9% of votes, slightly ahead of Le Pen with 21.4%, according to near-final results from the interior ministry. Macron, 39, a political novice, now becomes the favourite to be elected as France’s next president. He is the youngest ever French presidential hopeful and has never run for election before.