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GLOBAL MARKETS-Equity markets, euro rally in wake of French election

Published 2017-04-24, 11:10 a/m
© Reuters.  GLOBAL MARKETS-Equity markets, euro rally in wake of French election
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* Macron wins first round in French vote, ahead in polls

* Stocks on Wall Street rally 1 percent

* Safe-haven yen, Treasuries and gold fall

* Oil selloff continues (Updates with U.S. market open; changes byline, dateline; previous LONDON)

By Chuck Mikolajczak

NEW YORK, April 24 (Reuters) - 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 U.S. dollar as the first round of an election in France went to the market's preferred candidate.

Centrist Emmanuel Macron took a big step towards the French presidency on Sunday by winning the first round of voting and qualifying for a May 7 runoff alongside far-right leader Marine Le Pen. victory for the pro-European Union centrist Macron sent MSCI's gauge of stock indexes across the globe .MIWD00000PUS to a record high of 453.38.

The blue chip euro zone STOXX 50 index .STOXX50E surged 4 percent and was headed for its best day in nearly two years, while France's CAC40 .FCHI climbed 4.2 percent and was on track for its biggest daily percentage gain in almost five years.

Investors were concerned a victory for Le Pen could eventually put France on the path taken by Britain to leave the European Union.

"The nice thing about putting a black swan, geopolitical disaster situation behind you is you can start focusing on fundamentals," said Art Hogan, chief market strategist at Wunderlich Securities in New York.

"Coming into the weekend you had all that sort of risk off behavior that gets unwound pretty quickly when the disaster is avoided."

The Dow Jones Industrial Average .DJI rose 207.41 points, or 1.01 percent, to 20,755.17, the S&P 500 .SPX gained 23.31 points, or 0.99 percent, to 2,372 and the Nasdaq Composite .IXIC added 63.84 points, or 1.08 percent, to 5,974.37.

The pan-European FTSEurofirst 300 index .FTEU3 rose 1.99 percent and MSCI's gauge of world stocks .MIWD00000PUS gained 1.43 percent.

The euro pared earlier gains, but was still up more than 1 percent against the dollar EUR= and more than 2 percent up against the yen EURJPY= .

There was also an unwinding of safe-haven trades.

Shorter-term German bonds DE2YT=TWEB saw their biggest sell-off since the end of 2015 as investors piled back into French FR10YT=TWEB as well as Italian, Spanish, Portuguese and Greek debt. 10-year notes US10YT=RR last fell 15/32 in price to yield 2.2874 percent, from 2.236 percent late on Friday.

The Japanese yen JPY= weakened 0.8 percent versus the greenback at 109.97 per dollar. Wall Street's so-called fear-guage, the VIX volatility index .VIX , plunged the most since November.

Spot gold XAU= dropped 0.9 percent to $1,272.03 an ounce. U.S. gold futures GCcv1 fell 1.21 percent to $1,273.50 an ounce.

Meanwhile, investors are gearing up for the busiest week for corporate results in at least a decade on Wall Street, with more than 190 S&P 500 companies, including heavyweights Alphabet GOOGL.O and Microsoft MSFT.O , due to report.

Asia also saw a risk rally. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.61 percent higher, while Japan's Nikkei .N225 rose 1.37 percent.

Oil prices continued to decline after last week's selloff, weighed by signs U.S. production and inventory growth were offsetting OPEC's attempts to reduce a persisting global glut.

U.S. crude CLcv1 fell 0.97 percent to $49.14 per barrel and Brent LCOcv1 was last at $51.54, down 0.81 percent on the day.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Global assets in 2017

http://reut.rs/1WAiOSC Global currencies vs. dollar

http://tmsnrt.rs/2egbfVh Global bonds dashboard

http://tmsnrt.rs/2fPTds0 Emerging markets in 2017

http://tmsnrt.rs/2ihRugV

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Bernadette Baum)

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