BUDAPEST: Central European assets, mainly stocks and currencies rose on Monday after centrist Emmanuel Macron won the first round of France's elections, taking a big step towards becoming president.
Fears of a strong performance of the anti-EU far-right and radical left candidates had weighed on equities and currencies in the European Union's emerging markets.
Warsaw and Prague led a rebound of stocks, with their indices rising 1.3 percent by 1231 GMT, outperforming an 0.8 percent rise in MSCI's emerging market index.
The zloty gained 0.4 percent, the Czech crown 0.3 percent and the forint 0.2 percent. Volatility gauges for the region fell sharply.
The Polish and Hungarian currencies touched 2-week highs, with the forint bouncing back from 4-month lows and the zloty from one-month lows set before the French vote.
One Budapest-based dealer said there was unusually brisk trade in the forint's dollar cross after a jump by the euro to a five-month high against the dollar.
"The French election outcome, with all the earlier fears, matched expectations. One risk is removed now," one dealer said.
The region's government bonds, just like euro zone bonds, were mixed.
Romania sold the planned 800 million lei worth of 2-year bonds at an auction, with the average yield dropping to 1.48 percent from 1.59 percent in a sale in early March. The bonds traded around 1.45 percent later in the secondary market.
The leu underperformed other regional currencies, firming less than 0.1 percent to 4.532 to the euro.
The Romanian government is expected to submit a bill to parliament on Monday setting out further increases in public sector wages. The Romanian net average wage jumped 14.7 percent in annual terms in February.
The Czech crown reversed an earlier slide on Monday. It failed to make the gains many investors had bet on before the central bank removed a cap on the crown's value at 27 to the euro on April 6.
The currency crown could remain volatile for months, Czech central bank Governor Jiri Rusnok said on Friday. The bank will let the market find a rate for the crown it considers proper, he said.
In Hungary, anti-government protests have caused jitters in markets in the past three weeks, after the government passed legislation targeting a university founded by billionaire George Soros.
The Hungarian central bank is expected to retain its loose monetary policy at its meeting on Tuesday.
Comments
Comments are closed.