Yahoo Finance European stocks advance on French election hopes
Eurozone stock markets rallied Wednesday and the euro rose on hopes France could avoid a far-right majority in looming polls, while London also gained ground on the eve of its general election.
Wall Street mostly pushed higher in a shortened trading session ahead of Independence Day celebrations, with both the S&P 500 and Nasdaq Composite setting record highs on hopes of interest rate cuts.
The Paris stock market was Europe's standout performer after more than 200 centrist and left-wing candidates pulled out of Sunday's election runoff in France.
President Emmanuel Macron hopes the move will unify the vote and thus block the far-right National Rally (RN) of Marine Le Pen from gaining power.
France votes on Sunday in the final round of snap legislative polls Macron called after his camp was trounced in European elections last month.
That gamble backfired, with RN winning the June 30 first round. But the key question now is whether the RN can get enough seats to form a government.
- 'Growing confidence' -
Chris Beauchamp, Chief Market Analyst at online trading platform IG, said there is now a heightened chance France is headed for a period of political deadlock where neither left nor right has the upper hand.
"In the short-to-medium term, this should help European equities to keep moving higher, though the longer-term view is less encouraging," he said.
London stocks climbed, with the opposition Labour Party widely tipped to oust UK Prime Minister Rishi Sunak's Conservatives on Thursday, according to opinion polls.
"The UK Labour Party appears to be heading for a comfortable majority win, and the prospect of stability could provide a small boost to the market," City Index analyst Fiona Cincotta told AFP.
She cautioned however that "investors' apprehension could limit gains" ahead of the two key votes in Europe.
- Wall Street records -
Wall Street struck new highs a day after comments by Federal Reserve chief Jerome Powell fanned hopes of a US interest rate cut. He said the battle against inflation had made "progress" and the job market was cooling.
After a run of above-forecast data and warnings from central bank officials suggesting monetary policy would remain tight for some time, the remarks provided fresh optimism that a cut -- and possibly two -- was on the way before year-end.
Minutes from the last Fed meeting showed policymakers viewed employment and inflation goals as moving into "better balance," with some calling for "patience" on rate cuts.
Job market data out Wednesday were also cooler than forecast.
First-time and continuing claims for jobless benefits both rose and were higher than analyst expectations, while fewer new jobs were created in the private sector than foreseen.
Investors will be looking to non-farm payrolls and unemployment data due Friday for a better reading on the jobs market.
Survey data also showed a surprise contraction in US services sector activity in June.
- Key figures around 1800 GMT -
New York - Dow: DOWN 0.1 percent at 39,308.00 (close)
New York - S&P 500: UP 0.5 percent at 5,537.02 (close)
New York - Nasdaq Composite: UP 0.9 percent at 18,188.30 (close)
Paris - CAC 40: UP 1.2 percent at 7,632.08 (close)
Frankfurt - DAX: UP 1.2 percent at 18,374.53 (close)
EURO STOXX 50: UP 1.2 percent at 4,965.80 (close)
London - FTSE 100: UP 0.6 percent at 8,171.12 (close)
Tokyo - Nikkei 225: UP 1.3 percent at 40,580.76 (close)
Hong Kong - Hang Seng Index: UP 1.2 percent at 17,978.57 (close)
Shanghai - Composite: DOWN 0.5 percent at 2,982.38 (close)
Euro/dollar: UP at $1.0786 from $1.0745 on Tuesday
Euro/pound: DOWN at 84.65 pence from 84.70 pence
Pound/dollar: UP at $1.2737 from $1.2685
Dollar/yen: UP at 161.52 yen from 161.44 yen
Brent North Sea Crude: UP 1.3 percent at $87.34 per barrel
West Texas Intermediate: UP 1.3 percent at $83.88 per barrel
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