The French presidential election sparked a rally in the European stock market and the positive sentiments are spreading to Wall Street.
Wall Street Joins Europe Stock Rally in French Presidential Elections
Following the preliminary results of the French presidential election on Sunday, the main US stock markets climbed more than 1% on Monday.
Tech oriented Nasdaq index closed at a record high.
The main market in Europe climbed at least 2% with the euro rising to its highest in five months as fears of the election outcome eased.
US-based investor at Republic Wealth Advisors, David Levy, said the markets were reacting very positively to the news out of France.
Meanwhile, most stock markets in Asia have enjoyed gains for two consecutive days.
Japan’s Nikkei 225 climbed 0.4% in early morning trading while the Kospi in South Korea rose 0.1%.
Share markets in New Zealand and Australia remain closed for ANZAC day.
Sigh of relief
On Sunday, centrist Emmanuel Macron led the voting and is strongly opined to be the eventual winner in the May 7 runoff with far right candidate Marine Le Pen.
In the US, after gaining 1.2%, the index finished at 5,983.82, an estimated 67 points from last week’s record high.
Meanwhile, the Dow Jones and S&P 500 rose 1.1%.
In the US, as in Europe, the greatest gainers were banking stocks.
Well Fargo’s Fund Management chief portfolio strategist, Brian Jacobsen said, “This election alleviates fears that we are going to have to deal with a French exit from the European Union.”
He added, “This is a classic relief rally. The hurdle has been cleared and now it’s a bit clearer running.”
Frexit no more?
The Cac 40 share index in France ended the day 4% higher while the Dax in Germany closed 3.37% up.
The gains made by Cac are its highest since the 2008 financial crisis.
London’s FTSE 100 ended 2% higher.
At some point, the euro rose to its highest against the dollar since mid-November but later gave up some ground.
The euro climbed 2% as results trickled in on Sunday, its highest rally since 10 November but eased back later on Monday.
Sterling remained 1.3% lower against the euro to close at 1.17. Meanwhile, the pound fell 0.2% against the US dollar to close at 1.27.
Steven Bell, BMO Global Asset Management chief economist said, “The way the market has reacted shows how nervous investors were, concerned that actual results would deliver yet another shocking result.”