Eurozone stocks slid yesterday and the euro retreated from a six-month dollar high as investors looked beyond Emmanuel Macron’s French presidential victory to bet on whether he will be able to push through economic reforms.
The European single currency reached $1.1023, the highest level since November, at around 2030 GMT on Sunday after it became clear that the pro-EU former investment banker Macron had won.
However, the euro soon fell back and stood at $1.0923 in late afternoon trading.
The Paris stock market, meanwhile, ended the day down 0.9% at 5,382.95 points. Frankfurt slipped 0.2% at 12,762.04 points while London, outside the eurozone, edged up 0.05% at 7,300.86 points.
The EURO STOXX 50 was down 0.5% at 3,641.19 points.
“Market reaction to Emmanuel Macron’s victory over the weekend has definitely been a case of buy the rumour and sell the news, with the euro unable to build on the gains of last two weeks and the CAC40 slipping back after initially opening higher,” said Michael Hewson, chief market analyst at CMC Markets.
Macron, 39, has proposed an ambitious domestic reform agenda including cutting state spending, easing labour laws, boosting education in deprived areas and extending new protections to the self-employed.
But he is inexperienced, has no political party and must fashion a working parliamentary majority after legislative elections next month.
Earlier Monday, Asian stock markets mostly rose following Wall Street’s rally Friday as dealers cheered a strong US jobs report.
Markets had been given a positive lead from New York.
All three main US indices ended with healthy gains on Friday, with the Nasdaq posting yet another record, following a better-than-expected jobs reading.
The US economy added an estimated 211,000 net new positions in April while the unemployment rate fell to 4.4%, the lowest since May 2007, the Labor Department reported.
The reading further strengthens prospects the Federal Reserve will stick to a planned course of two more interest rate rises this year.
Tokyo’s Nikkei index, which closed for much of last week for Japanese holidays, ended Monday with a gain of 2.3%, reaching a 17-month high after playing catch-up.
Hong Kong won 0.4% and Sydney put on 0.6% by the close.
Seoul surged 2.3% to a fresh record high, the day before a presidential election to find a successor to the impeached Park Geun-hye.
However, Shanghai closed down 0.8%, with traders unimpressed by data showing China’s exports and imports rose less than expected last month and slowed from March.
The market has also been hit by concerns about government moves to crack down on leveraged investing that was fuelling instability.
The Euronext logo is seen on the exterior of the Paris Stock Exchange in La Defence business district. Paris stocks ended down 0.9% at 5,382.95 points yesterday.
