Europe open: Euro area lenders leap higher after French election results

Markets breathed an audible sigh of relief on Monday as the centrist candidate, Emanuelle Macron, came away the winner from the first round of voting in France's presidential elections at the weekend.

As of 08:26 GMT Paris's top-tier Cac-40 was higher by 3.46% to 5,234.39, alongside gains of 2.12% for the German Dax to 12,314.60 and of 3.1% for both Milan's FTSE Mibtel and the Spanish Ibex 35.

Shares of banks in the euro area were the best performers, leaping 5.6% higher, while the euro was up by 1.22% against the US dollar.

Macron beat both his rivals and the pre-election polls, coming in first with 23.86% of the votes with the ballot count 97.4% complete, versus 21.4% for his nearest rival Marine Le Pen.

For the most part, analysts sounded an optimistic note on the implications of Macron's win for the French economy and the current drive to reform it, with some investors billing the presidential elections as a contest between the optimists and pessimists in France.

"The most likely outcome of the second round vote remains a Macron presidency, which we think would benefit the French economy. His planned labour market reforms would help to boost growth, even if his target of an unemployment rate of 7% by 2022 is very ambitious, given its historical path.

"And his pro-business stance should support investment. His presidency would also bode well for the EU, perhaps particularly if combined with a Schulz presidency in Germany after September’s election there," said analysts at Capital Economics.

Nonetheless, the fact remains that nearly 46% of the electorate voted for candidates who questionned the country remaining in the euro.

Analysts appeared more divided on the other hand about the knock-on effects for Britain, with some indicating that greater stability in France and the EU would help the UK.

Carsten Nickel of Teneo Intelligence on the other hand told Bloomberg that French far-right candidate Marine Le Pen's strong showing and the elevated levels of euro-skepticism in France mean Macron has an incentive to play 'hard-ball' with Westminster.

"[The next president] can’t let the U.K. get away with a benign deal" or French voters might start to eye the exit as well, he said.

On the economic calendar for Monday, the German IFO institute's business confidence gauge for April is expected to show a slight improvement. After the close of trading in London, US Federal Reserve president Neel Kashkari is set to make a speech and participate in a Q&A session later in the day.

Stock in Deutsche Post DHL Group is trading higher after a person familiar with the matter told Reuters it is seeking a buyer for its British outsourcing subsidiary Williams Lea.

Dortmund may buy more shares in German power maker RWE, the city's mayor told the Westdeutsche Allgemeine Zeitung over the weekend.

Order intake at Volkswagen´s Scania truck unit was "really strong" during the first quarter, its boss Henrik Henriksson told Dagens Industri.