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London open: Stocks push higher amid French election relief
London stocks rallied in early trade, tracking their European counterparts amid expectations that centrist Emmanuel Macron will beat off far-right nationalist Marine Le Pen in the second round of the French election.
At 0825 BST, the FTSE 100 was up 1.8% to 7,243.81. Meanwhile, the pound was down 0.1% against the dollar to 1.2789 and off 1.2% versus the euro at 1.1797.
Eyes were firmly on France, where Emmanuel Macron and euro-sceptic Marine Le Pen won the first round of voting in the presidential election, seeing them through to the final run-off on 7 May. With 97.43% of votes counted, Macron has 23.86% to Le Pen’s 21.43%.
Morgan Stanley said: “The wide-enough margin allows markets to conclude that concerns Macron may not have the ability to translate support into effective votes may disappear.”
“Before the election it was feared the supporters of extremist candidates would show a higher commitment to vote compared to mainstream candidates. The moderate overall participation rate, and, even more important, the fact that Macron has come out first within the first round of the Presidential race, suggest that markets may reduce political-related risk premiums.”
Meanwhile, Deutsche Bank said: “Overall, the probability of a Le Pen presidency has decreased but is not yet nul. The risks of a possible new scandal, strong debate performance by the National Front leader or complacency from the electorate should still be monitored.”
On the market, banks were the biggest gainers, with Barclays, RBS, and Standard Chartered all in the black.
B&Q and Castorama owner Kingfisher – whose French division accounts for a large chunk of the group’s turnover – racked up healthy gains.
Anglo American gained ground as it said copper production fell in the first but full year guidance was kept unchanged across the board as amounts of iron ore, coal and diamonds unearthed all rose strongly.
Independent IT infrastructure services provider Computacenter rallied after it put out a trading update for the first quarter – earlier than the date previously advised – due to its performance in the first quarter and an improved outlook for the full year.
Petra Diamonds pushed higher after it reported that third-quarter production was flat year-on-year at 999,768 carats compared with 995,905 carats. Production for nine months to 31 March 2017 was up 15% to 3,014,856 carats and the company maintained full year production guidance of around 4.4m carats.
Goals Soccer Centres rose sharply after the five-a-side operator confirmed that it was in discussions with rival Powerleague about the possibility of combining the two businesses.
Kenney Wilson Europe Real Estate surged after it agreed terms of a recommended all-share merger with Kenney Wilson Holdings.
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 Cte d’lvoire beyond its four-year lifespan.
Tritax Big Box was weaker after announcing that it will raise 200m in equity in order to capitalise on property investment opportunities.
On the macroeconomic calendar, the CBI industrial trends survey is at 1100 BST.
