The Nikkei 225 rose 1.34 percent, or 249.49 points, to sit at 18,870.24 by the lunch break, as investors cheered news that market-friendly Emmanuel Macron is leading far-right candidate Marine Le Pen in the French presidential race. / AFP /
HONG KONG, China (AFP) — Asian markets extended gains Tuesday while the euro held up following Emmanuel Macron’s first round presidential election win in France, with investors now looking forward to United States President Donald Trump’s promised tax reforms.
Global markets soared Monday after Macron topped the initial polls and looked well on course to beat hit run-off rival, far-right candidate Marine Le Pen, next month.
There had been fears a win for the anti-European, anti-immigrant Le Pen could see France pull out of the euro and even the European Union and precipitate its possible collapse.
US and European markets tracked an Asian advance Monday. And on Tuesday the gains continued with Tokyo up 0.8 percent by the break, Hong Kong also jumping 0.8 percent and Seoul 0.4 percent higher.
Shanghai, which has suffered a series of losses in the past two weeks on concerns about a government crackdown in leveraged investing, edged up 0.2 percent.
Sydney and Wellington were closed for a public holiday.
And on currency markets the euro, which briefly broke $1.09 Monday for the first time in almost a month, was hovering around $1.086, while it also held at 119.50 yen, well up from levels around 117 yen before France’s vote.
“With the market pricing in an amiable scenario for risk assets in the second round, investors should continue to feed off this,” said Stephen Innes, senior trader at OANDA.
Now attention moves to the US where Trump is due to unveil his much-vaunted tax overhaul Wednesday, which will call for cuts to personal and corporate rates, Bloomberg news reported a White House official as saying.
Trump’s pledge to slash taxes and boost infrastructure spending were key drivers of a global market rally after his November election, though the past few weeks have seen a retreat as he failed to pass key healthcare legislation, throwing the agenda into doubt.
However, there was a sense of trepidation as North Korea celebrates the 85th anniversary of its army, with fears Kim Jong-Un could press on with his recent saber-rattling with the US by conducting another nuclear or missile test.
Growing tensions between Pyongyang and Washington have fanned worries about a possible conflict in East Asia.
Another source of concern among traders is the threat of another costly US government shutdown as Trump heads for a face-off with Democrats over funding his controversial Mexican border wall.
Building the wall was a key election promise and he is determined to get Congress to approve a downpayment as part of a bigger bill to keep the US government funded.
The two sides have until Saturday to pass the bill or face the first shutdown since a 16-day closure in 2013 that cost the government billions of dollars.
Key figures at 0230 GMT
Tokyo – Nikkei 225: UP 0.8 percent at 19,034.74 (break)
Hong Kong – Hang Seng: UP 0.8 percent at 24,337.72
Shanghai – Composite: UP 0.2 percent at 3,135.32
Euro/dollar: DOWN at $1.0859 from $1.0867 at 2100 GMT
Pound/dollar: DOWN at $1.2778 from $1.2793
Dollar/yen: UP at 109.90 yen from 109.78 yen
Oil – West Texas Intermediate: UP 14 cents at $49.37 per barrel
Oil – Brent North Sea: UP 14 cents at $51.74
New York – Dow: UP 1.1 percent at 20,763.89 (close)
London – FTSE 100: UP 2.1 percent at 7,264.68 (close)
© Agence France-Presse
