World financial markets higher after French centrist Macron comes out on top

European stock markets and the euro ratcheted higher Monday, particularly in France, after the first round of the country’s presidential election saw centrist Emmanuel Macron emerge on top — stoking hopes that he will defeat far-right Marine Le Pen in the run-off in two weeks’ time.
 
Though Le Pen came second with 21.5 per cent of the vote on Sunday and will contest the runoff on May 7, the favourite to be the country’s next president is Macron, who came top with around 24 per cent. Following Britain’s vote to leave the European Union and Donald Trump’s surprise victory in the U.S. presidential election, the hope in the markets is that the rise of populism around the world — and the associated potential unpredictability in policymaking — may have peaked. That hope was also evident in the performance of the euro, which was up 1.1 per cent at $1.0846 US, having struck five-month highs overnight above $1.09 US.
“In Macron, we see the strongest opponent pitted against Le Pen, in what is likely to be the final vote of confidence for the EU in what was always going to be a critical year for the future of Europe,” said Joshua Mahony, market analyst at IG.
Though the second run of the French election will remain in the spotlight, there’s likely to be investor interest also in upcoming tax proposals from the Trump administration. However, investors aren’t expecting too much from Wednesday’s anticipated announcement following the recent reverse on repealing the Affordable Care Act. “Markets have received this news with a big pinch of salt,” said FXTM Research Analyst Lukman Otunuga.
Benchmarks in Shanghai and Shenzhen fell by more than 1 per cent in their worst losses in four months after regulators warned over the weekend of risks in the financial industry. The Chinese Insurance Regulatory Commission, in a notice carried by the state-run Xinhua News Agency, ordered insurers to improve risk controls amid a crackdown on misuse of capital.
Japan’s benchmark Nikkei 225 rose 1.4 per cent to finish at 18,875.88. Australia’s S&P/ASX 200 gained 0.3 per cent to 5,871.80. South Korea’s Kospi added 0.4 per cent to 2,173.74. Hong Kong’s Hang Seng added 0.5 per cent to 24,164.24.
Benchmark U.S. crude rose 27 cents to $49.89 US a barrel in New York while Brent crude, used to price international oils, rose 32 cents to $52.28 US a barrel in London.