European shares open sharply higher and the euro briefly vaults to five-month peaks after the market's favoured candidate won the first round of the French election, reducing the risk of another Brexit-like shock. Ciara Lee reports.
Investors breathe a collective sigh of relief. European equity markets soared after Emanuel Macron won the first round of the French election. The pro-EU centrist is widely expected to beat right-wing rival Marine Le Pen in the deciding vote in a fortnight. Sterling fell sharply against the euro, which vaulted to five-month peaks as investors piled back into the currency. France's benchmark CAC40 index was up almost four percent and bank stocks gained more than six. (SOUNDBITE) (English) CITY INDEX, SENIOR MARKETS ANALYST, KATHLEEN BROOKS, SAYING: "There is expectation that European shares in particular are going to start outperforming their U.S. shares. Because they are considered a better valuation. So whenever there is excess trading activity or chances of volatility then we are tending to see bank shares start to rise. I think the other reason is that he is considered market friendly and the banks are the clear way to express that." So-called safe-haven trades were unwound after the vote. Gold, government bonds and the yen all took a tumble as the appetite for riskier assets crept back in. The rally was welcome - although it's sustainability in doubt. (SOUNDBITE) (English) BGC PARTNERS, MARKET ANALYST, MIKE INGRAM SAYING: "The political landscape has clearly shifted despite this market pleasing result today. And I think it would be a very, very brave person to forecast that prices of fragmentation has already reached its high water mark. I very much doubt that myself." But investors were making the most of the bounce, piling back into French as well as Italian, Spanish and Greek debt. The risk of an anti-establishment shock on the scale of Britain's Brexit vote fading .. for now at least.