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European stocks dragged on Monday despite Macron's election win

Emmanuel Macron
Emmanuel Macron

REUTERS/Stephane Mahe

LONDON — Stocks across Europe were largely lower on Monday despite Emmanuel Macron securing a decisive and bigger than expected victory in Sunday's French presidential election.

The 39-year-old pro-EU candidate, defeated Marine Le Pen, a far-right nationalist who called for France to exit the European Union, by a margin of more than 31 points, winning 66.06% of votes cast. That margin was even bigger than had been forecast by polls in the run-up to the vote.

Macron, who is strongly pro-EU was the candidate most favoured in the financial markets given that his election means virtually zero chance of France leaving either the euro or the EU.

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Most of Europe's major bourses had been expected to jump at the opening bell, most bourses actually lost ground, which is likely in part due to the fact that markets had taken a Macron victory as something of a foregone conclusion and priced his victory in.

Also providing a drag on the day was data out of China showing that exports and imports did not rise as much as expected last month, leaving the world’s second-largest economy with a bigger trade surplus.

"The French election turned out to be a buy the first round, sell the second round affair. French shares fell on Monday with the CAC index down significantly more than other European equity benchmarks.  It’s not disappointment in Macron, who is widely seen as business-friendly but just that the market saw this result coming a mile away. The French dip has already been bought," Jasper Lawler, senior market analyst at London Capital Group said in an email earlier in the afternoon.

This combines to create a picture where by the close France's CAC40 actually lost close to 1%. Here is the wider European scoreboard:

Screen Shot 2017 05 08 at 17.04.05
Screen Shot 2017 05 08 at 17.04.05

Investing.com

Despite that fall, it should be noted that the CAC remains close to nine-and-a-half year highs after a strong week last week in the run-up to the vote.

Stocks rallied aggressively after Macron made it through to the second round of voting late in April, with the CAC 40 climbing more than 4% the day after the initial vote. 

Elsewhere in markets, the euro is was lower after the result.

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