London close: FTSE firmly ahead on Macron cheer

Stocks in London ended their Monday firmly ahead as investors took cheer from centrist and pro-EU candidate Emmanuel Macron winning the first round of France's presidential election.

Standard Chartered

944.80p

15:45 15/11/24

0.66%

6.20p

Macron faces far-right hopeful Marine Le Pen in the second and final round on 7 May. In Europe, the Euro Stoxx 50, Cac 40 and Dax were all up more than 3%.

In London, the FTSE 100 closed the day up 2.11% at 7,264.68, with almost every constituent making gains. The FTSE 250 rose 1.26% to 19,602.83. Sterling was down moderately against the dollar and heavily so against the euro.

Chris Beauchamp, chief market analyst at IG, said the FTSE 100 had ended the session in fine fettle, pointing to the rosy reaction to Macron's first-round win.

"Of course, this hasn’t solved all the other problems, such as North Korea, Syria and the Trump administration’s failure to produce any major reforms, but for now the bears have been forced to get out of the way or risk being trampled in the rush to buy stocks again," he said.

Connor Campbell, financial analyst at SpreadEx, said the FTSE's gains were in part -- and once again -- helped by a weaker sterling.

"After the giddy reaction to (PM) Theresa May's snap election announcement, and the (perhaps misguided) assumption that an increased Tory majority will lead to less fraught Brexit negotiations, sterling has had a bit of battering against the euro this Monday," he said.

Jasper Lawler, senior market analyst at London Capital Group, observed that banks were the obvious high-beta recipients of a more certain economic outlook for the Eurozone with Macron potentially at the helm in France.

"Macron winning the first round of the French Presidential election sent markets into ecstasy. The euro hit its highest against the dollar since Donald Trump won the US election, French bank shares soared (some by double digits) and German stocks reached a new all-time high," he said.

"Markets have written off Marine Le Pen as French President in 2017 and with it the existential threat to the euro and the redenomination risk of all French assets."

However, Accendo Markets analyst Mike van Dulken cautioned that it was "anyone's guess" as to whether the pollsters would be proved correct in the second round of French voting.

"Fresh talk of Trump tax hopes appear to have been tempered and markets (are) still wary that aims will be elaborated on rather than actual policy progress, markets getting increasingly impatient for the latter, while the man himself concentrates on relationships with China and what to do with North Korea to keep us on our geopolitical toes."

Banking and financial stocks were obvious beneficiaries. Barclays, Standard Chartered, Old Mutual, Royal Bank of Scotland, Aviva, RSA Insurance and Lloyds Banking Group were prominent gainers.

More than 50 stocks on the FTSE 100 made gains of more than 2%. Mining and oil majors, pharmaceuticals, and all types of property companies did well.

On the downside, utilities Centrica and SSE retreated on news that the Conservative manifesto will include a cap on household energy bills. Centrica was also dragged lower by a downgrade to 'neutral' from UBS.

Randgold Resources was in the red after saying it is seeking to extend the operation life of its Tongon gold mine in the Côte d'lvoire beyond its four-year lifespan.

Market Movers

FTSE 100 (UKX) 7,264.68 2.11%
FTSE 250 (MCX) 19,602.83 1.26%
techMARK (TASX) 3,463.18 1.27%

FTSE 100 - Risers

Smurfit Kappa Group (SKG) 2,103.00p 6.05%
Barclays (BARC) 219.20p 5.41%
CRH (CRH) 2,854.00p 5.35%
International Consolidated Airlines Group SA (CDI) (IAG) 569.00p 4.98%
Standard Chartered (STAN) 718.50p 4.75%
Old Mutual (OML) 200.40p 4.70%
Paddy Power Betfair (PPB) 8,710.00p 4.69%
GKN (GKN) 367.40p 4.58%
Royal Bank of Scotland Group (RBS) 249.30p 3.96%
Mondi (MNDI) 2,013.00p 3.55%