French election: Macron poll boost sparks European relief rally as banks soar

European banks led a relief rally on Monday after business-friendly candidate Emmanuel Macron topped France’s first-round election poll, cutting the chance of Frexit.

Macron, a former Rothschild banker, is expected to outpace rival Marine Le Pen in the final election vote on May 7, paving the way for an overhaul of France’s economy and ending Le Pen’s bid to leave the single currency.

French lenders Société Générale and BNP Paribas jumped 9% and 8% , helping pushed the Eurostoxx index of European banks up 7%, its highest in more than a year. French bonds soared.

UK lender Barclays also topped the FTSE 100, gaining 10.05p, 4.8%, at 218p while Kingfisher, which owns French department stores Castorama and Brico Dépôt, put on 3.6%, or 11.9p, to hit 340.1p.

The CAC-40, France’s blue-chip stock index, increased 4.1% to 5267.88 and the FTSE 250 hit a record high of 19,600 after rising almost 1%.

“Le Pen will almost certainly be defeated in two weeks’ time,” State Street’s Bill Street said. “Equities can continue to rally going into 2018 as non-existential risks can be absorbed.”

Markets had been on edge over fears Le Pen would end up in a two-horse race with left-winger Jean-Luc Mélenchon.

The euro rose 1% to $1.0875, its best day in 10 months against the dollar.