Macron victory in French poll drives European relief rally

Global equity markets rallied on Monday, boosting a gauge of world stocks to a record high, while the euro briefly jumped to a five-month peak against the US dollar as the first round of an election in France went to the market's preferred candidate.

DUBLIN

Imitating the Stoxx Europe 600, it was banks that led the charge on Ireland's benchmark index, which closed up 2.98 per cent. Bank of Ireland and Permanent TSB traded up by 4.51 per cent and 5.60 per cent respectively.

While financials performed well, it was also a good day for other companies with general European exposure like Ryanair, which gained 3.35 per cent.

One of today's losers on the Iseq 20 was Hibernia REIT which, according to traders, fell on the news that Kennedy Wilson Holdings had proposed a merger with Kennedy Wilson Europe. Hibernia stock fell by 0.08 per cent to €1.261.

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Another loser was FBD Holdings which fell by 0.56 per cent. The stock is said to have dropped as a result of comments made by Europcar Ireland chief executive Colm Menton to the Oireachtas Joint Committee on Finance. Mr Menton suggested that insurance premiums could decline by between €110 and €140 if whiplash compensation was capped.

LONDON

Britain's top share index jumped on Monday as banking stocks surged after centrist Emmanuel Macron came out on top in the first round of France's presidential election. The blue chip FTSE 100 index rose 2.11 per cent, on track for its biggest one-day jump since early December 2016 and outpacing the mid-caps.

UK banks jumped on the day, joining in with a broader risk-on rally among European lenders. Shares in Barclays rose nearly 5.41 per cent, while Standard Chartered was up 4.75 per cent and Royal Bank of Scotland gained 3.96 per cent.

Shares in home improvement firm Kingfisher were also among the biggest gainers, rising 2.74 per cent. In March, Kingfisher warned that the impact from the Brexit vote and potential disruption from the French election could hit trade in its two main markets. France accounted for 38 per cent of Kingfisher's sales in 2016.

EUROPE

Europe’s STOXX 600 index closed 2.1 per cent higher, with France’s CAC 40 up 4.1 per cent, posting its best day’s gains since August 2012. Germany’s DAX hit a new record high, up 3.4 per cent.

French and Italian banks saw the biggest gains across the region with the euro zone's bank index rising 7.4 per cent to its highest level in 16 months. Paris blue-chips hit their highest since January 2008, up 4.1 per cent. The top eight gainers on the pan-European index were banks, with UniCredit, Credit Agricole and UBI Banca leading the way, up 13.2, 10.9 and 10.4 per cent respectively.

Italy, considered to be especially vulnerable to any anti-European event, had an even stronger rally than France. Its FTSE MIB soared 4.8 per cent to its highest since January 2016, driven by strong gains in banks, which jumped 9.1 per cent.

NEW YORK

Wall Street surged on Monday, tracking the same relief rally that swept through European markets.

Ten of the 11 major S&P sectors trading higher, led by financials. US investors are also gearing up for the busiest earnings week in at least a decade, with over 190 S&P 500 members, including heavyweights Alphabet and Microsoft due to report results.

Of the 100 S&P 500 companies that have reported results so far, 77 per cent have beaten profit expectations, according to Thomson Reuters.

Hasbro hit a record high after reporting better-than-expected revenue and profit. Medical device maker CR Bard jumped after US medical equipment supplier Becton Dickinson said it would buy Bard for $24 billion (€22.1 billion).

– (Additional reporting: Reuters)