Iseq soars to nine-year high as markets cheer French vote

Value of euro jumps after centrist candidate wins first round of presidential election

Irish shares soared to levels not seen since before the financial crisis as European equities and the value of the euro jumped after a centrist candidate won the first round of the French presidential election, reducing the risk of an anti-establishment shock in the final round.

The Iseq index closed 3.1 per cent higher on Monday at 6,946.55 points, a level not seen since January 2008, after breaching a previous post-crisis high of 6,886 reached in December 2015. Permanent TSB and Bank of Ireland were among the main gainers in Dublin.

France’s CAC 40 rose 4.25 per cent, the FTSE 100 advanced 2.1 per cent in London, and Germany’s DAX index jumped 3.4 per cent to an all-time high.

French independent centrist candidate Emmanuel Macron, a pro-EU ex-banker and former economy minister, emerged as the leader of the first round of voting and qualified for a May 7th run-off alongside the second-place finisher, far-right leader Marine Le Pen.



His victory makes him the front-runner in next month’s election, and marked a huge defeat for the two centre-right and centre-left groupings that have dominated French politics for 60 years.

“Polls give [Macron] nearly two-thirds of the electorate in a run-off with Le Pen, while the defeated establishment parties have now rowed in behind his campaign,” said David McNamara, an economist with Davy. “If the polls are to be believed, Macron’s victory will be by a large margin of 64 per cent to 36 per cent.”

The euro ended the European session up 1.1 per cent at $1.0847 after rising as high as $1.0940 in Asian trading, its highest since November 10th, the week Donald Trump won the US presidential election.

The euro rose 1.25 per cent to 84.83p sterling, having risen above 85p at one stage. This compares with a close of 83.8p on Friday after sterling gained last week following the announcement of a UK general election.


Jake Trask, a currencies analyst in London with foreign exchange firm OFX, said: "With Macron now looking like a shoo-in for the presidency, markets have breathed a huge sigh of relief and rallied higher as the chances of Le Pen being able to enact her plan to lead France out of the euro evaporate."

The French vote and the euro's rise come ahead of a European Central Bank policy meeting on Thursday, at which the central bank's ultra-easy stance is set to remain unchanged.

The market interest rate, or yield, on French 10-year government bonds fell by 0.11 percentage points to 0.82.5 per cent. The yield on Irish bonds dropped by 0.05 points to 85.3 per cent. – (Additional reporting: Reuters)

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times