European stock markets rose on Monday and US equities ended at records as traders cheered a strong victory for French President Emmanuel Macron’s centrist party in parliamentary elections.
London’s benchmark FTSE 100 index ended the day 0.8 percent higher, while in the eurozone, Frankfurt’s DAX 30 index and the Paris CAC 40 each advanced about one percent.
US markets also scored strong gains, with the Dow and S&P 500 finishing at records and the Nasdaq surging 1.4 percent on strong gains by Apple, Microsoft and other tech giants.
“Equities have made a strong start to the new trading week,” said Accendo Markets analyst Mike van Dulken. “Macron gaining a French parliamentary majority has been welcomed for Europe, as have delayed Brexit negotiations finally getting underway.”
Macron’s year-old Republique en Marche party won one of France’s biggest post-war majorities, strengthening his hand in implementing his program of business-friendly reforms.
Meanwhile, Britain’s Brexit minister David Davis on Monday met with the EU’s chief Brexit negotiator, Michel Barnier, kicking off hugely complex withdrawal negotiations that are expected to conclude within two years.
“A slightly softer form of Brexit now looks more likely than previously envisaged,” according to analysts at Capital Economics, “but we doubt that the government will do a full U-turn on its Brexit stance.”
Sentiment in the US was boosted by upbeat commentary from influential New York Federal Reserve Bank President William Dudley, who reaffirmed the Fed’s plan to continue to increase interest rates in expectation of higher inflation.
That supported financial stocks, which joined technology giants like Apple and Facebook, and pharma shares in posting strong gains. The tech rally marked a reversal from a series of bruising sessions over the last two weeks.
The dollar also progressed following Dudley’s remarks, which “helped assuage dollar traders, who had been somewhat wary of the Fed’s hawkish stance given recent weaker-than-expected inflation and employment data,” said Forex.com analyst James Chen.
New York – Dow: UP 0.7 percent at 21,528.99 (close)
New York – S&P 500: UP 0.8 percent at 2,453.46 (close)
New York – Nasdaq: UP 1.4 percent at 6,239.01 (close)
Euro/dollar: DOWN at $1.1149 from $1.1194 at 2100 GMT on Friday
Pound/dollar: DOWN at $1.2734 from $1.2777
Dollar/yen: UP at 111.54 yen from 110.89 yen
Oil – Brent North Sea: DOWN 46 cents at $46.91 per barrel
Oil – West Texas Intermediate: DOWN 54 cents at $44.20 per barrel
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