French stocks surged more than 200 points at the start of trading Monday, the most in nearly two years, while equities around Europe posted significant early gains after the first round of the country's presidential elections put centrist Emmanuel Macron in the driver's seat to enter the Elysee Palace.
The CAC-40 posted an early 206 point gain, or 4.05%, in the opening minutes of trading in Paris as traders repriced stocks on the benchmark in the wake of Macron's win and early polls indicating the 39-year old former investment banker holds a 20-point lead over far-right rival Marine Le Pen heading into the second round runoff on May 7.
BNP Paribas SA (BNPQY) , the country's biggest lender, gained more than 10% at the bell before paring the advance to around 8% as prices settled, with rivals Credit Agricole SA (CRARY) and Societe General SA (SCGLY) posting early 8% increases.
Germany's DAX index jumped 2.3% in the opening minutes of trading, on track for its biggest gain since August, as investors reacted to the diminishing risk of a French exit from the European Union. Deutsche Bank AG (DB - Get Report) was marked 6% higher at €16.53 each while Commerzbank AG (CRZBY) , the country's second-largest bank, was see 8.1% higher. Britain's FTSE 100 gained more than a 100 points, or 1.65%, but gains were tempered by both an elevated pound and a series of stocks trading without the right to their regular dividend.
Early market reaction to last night's results lifted the euro to the highest level against the U.S. dollar since early November, as the single currency rose to 1.0940 before paring gains in Asia trading to around 1.0849 at 06:45 GMT.
Bond markets were also in focus, with benchmark 10-year U.S. Treasury yields rising 7 basis points to 2.32% in overnight trading as risk sentiment improved. The moves haven't yet boosted the U.S. dollar, however, which remains firmly on the back foot at 98.89 against a basket of six global currencies.
The overall market rally, however, reflected both the emergence of Macron -- a former investment banker who served as Economy Minister under the current president, Francois Hollande -- and the early endorsements from rivals keen on supporting the 39-year old upstart in a run-off against the anti-European candidacy of Le Pen. Polls suggest Macron, a staunch European, holds at least a 20-point lead over Le Pen heading into the second round.
Asia stocks got a significant early boost, particularly in Japan, where the Nikkei 225 added around 1.4% to close at 18,875.88 points. The region-wide MSCI Asia ex-Japan index, however, was slightly more muted, gaining around 0.3% as markets in China traded weaker.
Early indications from U.S. futures prices point to solid gains on Wall Street, as well, with the Dow Jones Industrial Average priced to gain nearly 200 points at the opening bell and the broader S&P 500 set for a 26 point bump at the start of trading.