Meanwhile, ahead of the European open, France’s benchmark CAC 40 equity index was expected to open around 5 percent higher, leading anticipated gains in the U.K.’s FTSE 100 and Germany’s DAX index, seen trading up by around 41 points and 186 points respectively, according to spreadbetters quoted by Reuters. U.S. equity futures also reflected a higher expected open with the Dow Jones industrial average expected to soar by nearly 200 points.
Nonetheless, the portfolio strategy research team at Goldman Sachs led by Peter Oppenheimer contended in a research note late on Sunday that equity markets had already largely priced in the first round outcome and they therefore did not expect a significant equity rally from here.
“As this has largely been the central expectation priced into the markets, we would expect any rally to be modest. French domestic stocks and the CAC 40 have not underperformed significantly as of late, and we do not expect them to rally materially following today’s results, or after the second round of the election.”
Centrist Emmanuel Macron of the independent En Marche party secured the lion’s share of votes in Sunday’s preliminary election at 23.7 percent, with the far-right’s Marine Le Pen of France’s National Front party trailing narrowly behind at 21.7 percent, according to Harris poll estimates. Separately, the French Interior ministry announced its final figures at 5 a.m. local time on Monday morning which showed that Emmanuel Macron had won 23.75 percent of the vote versus Le Pen’s 21.53 percent. With tactical voting expected to dominate in the final round scheduled for Sunday May 7 and several political heavyweights, including incumbent French Prime Minister Bernard Cazeneuve and losing first round Republican candidate Francois Fillon throwing their support behind Macron, the 39-year-old former banker heads into the showdown as the favorite. Two separate polls from Ipsos/Sopra Steria and Harris released on Sunday anticipate Macron winning around three-fifths of the vote in the final.
