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Stocks, euro surge as France's Macron favored for presidential win

New York - Global markets rallied on Monday after moderate candidate Emmanuel Macron won the first round of France's presidential election, sending stocks to records on both sides of the Atlantic and boosting the euro.

Sunday's election result avoided the most feared outcome: a second-round contest May 7 between far right, anti-immigration candidate Marine Le Pen and far left Jean-Luc Melenchon, both fierce critics of the European Union.

"Collectively, there has been a big sigh of relief in global markets this morning after the first round of balloting in the French presidential election avoided the worst-case scenario of a Le Pen-Melenchon run off," said Briefing.com analyst Patrick O'Hare.

Germany's blue-chip DAX index jumped 3.4% to end at a fresh record, while Paris climbed 4.1% and London 2.1%.

Major US indices gained more than 1% and the Nasdaq finished at a new record on large gains for Google parent Alphabet, Facebook and other tech giants.

Banking stocks, in particular, took off, with some financials, like Societe Generale and Credit Agricole in Paris, posting double-digit intraday gains and US names like JPMorgan Chase and Bank of America winning more than 3%.

Investors globally had been fearful that a wave of populism, which swept US President Donald Trump into the White House and saw Britain vote to leave the EU, could lead to a win for the anti-European Le Pen and put the future of the bloc in doubt.

However, Macron is widely expected to gallop to victory over the divisive National Front leader and traders gave a huge thumbs-up.

The euro shot higher to trade above $1.09 at one point, compared with $1.0726 on Friday.

"European markets are in a buoyant mood," said Joshua Mahony, market analyst at IG trading group. "The move back into risk assets means the chief losers have been the likes of gold and the Japanese yen, with stock markets moving sharply higher."

The price of safe-haven gold fell by more than 1% on the day.

But will it last?

Some cautioned that the party mood may fizzle out by the time of the second round vote in two weeks, followed by a parliamentary vote in June.

"Our optimism is a bit muted," said Stefan Kreuzkamp at CIO Deutsche Asset Management. "A lot depends on the outcome of the parliamentary election and how this outcome supports Macron's mandate."

Macron, a political neophyte despite serving as a government minister, has no established political organisation behind him and no seats in parliament.

Oil had another volatile day as investors mulled the chances of Opec extending an output cut agreement beyond June. After a firmer start, the oil price fell back into negative territory on selling by traders doubting that any extension, if agreed, would actually soak up the current glut on oil markets.

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