Asian shares rose Monday after Emmanuel Macron, a centrist would-be reformer and supporter of the European Union, won the French presidential election. Japan’s benchmark Nikkei 225 added 1.6 percent in the morning session to 19,763.25, reflecting investor relief over the outcome.The euro, shared by France and 18 other countries, was trading at $1.0966. It had edged up 0.1 percent to $1.1013 in late Sunday trading in Europe. The dollar was trading at 112.81 yen, up slightly from 112.59 yen late Friday in Asia.
Other Asian stock markets were also higher, cheered by the results. South Korea’s Kospi added nearly 0.6 percent to 2,253.90. Australia’s S&P/ASX 200 gained 0.6 percent to 5,872.60. France’s CAC 40 index had risen last week to its highest since early 2008 – before the worst of the global financial crisis – in anticipation of the result.
While Macron’s win had been widely anticipated, the election had cast a long shadow over the continent as the defeated candidate, the far-right Marine Le Pen, had wanted France to exit the 28-nation EU, with potentially catastrophic consequences for the region and its euro currency. ”Europe dodges a bullet here,” said Paul Christopher, head global market strategist for Wells Fargo Investment Institute.
Analysts said the strong jobs data in the U.S., released at the end of the last week, were adding to the cheery sentiments in Asia. Attention was turning to other regional economic indicators, including trade data on China, they said. ”A sense of normalcy has returned to the Forex desks this morning as the final round of the French elections had the expected,” said Stephen Innes, senior trader at OANDA.
The rise in the euro was not as strong as it was after Macron’s victory in the first round of the presidential vote, as investors seem to have largely expected the outcome and polls showed him consistently in the lead by a wide margin going into the second round.
But analysts say that the result lifts a huge amount of uncertainty for the European economy, which is just picking up some momentum after years of financial crises and stagnation. ”This is certainly positive for the European economy,” said Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics. The prospect of a Le Pen presidency had unnerved some after polls had failed to accurately read the popular sentiment that led to Britain’s vote last year to leave the EU and the election of President Donald Trump. Among Le Pen’s proposals was to have a referendum on EU and euro membership – and experts agree the euro wouldn’t have survived the departure of its founding member and second-biggest economy.
Macron has vowed to strengthen the EU and euro and to reform France’s economy, which hasn’t grown quickly enough in recent years to bring unemployment decisively below 10 percent. He will face a stern test in trying to do so as he will likely struggle to put together a majority in parliament for his year-old party in parliamentary elections next month.
Wall Street had finished the week at record highs. The Standard & Poor’s 500 index climbed 9.77 points, or 0.4 percent, to 2,399.29. The Dow Jones industrial average rose 55.47 points, or 0.3 percent, to 21,006.94.The Nasdaq composite jumped 25.42 points, or 0.4 percent, to 6,100.76, which beat a record it set earlier this week.
U.S. crude oil gained 52 cents to $46.74 a barrel. It had jumped 70 cents, or 1.5 percent, to $46.22 a barrel in New York late Friday. Brent crude, the standard for international oil prices, added 60 cents to $49.70 barrel in London.