Eurozone stocks, euro drop as traders look past Macron win

LONDON: Eurozone stocks slid Monday and the euro retreated from a six-month dollar high as investors looked beyond Emmanuel Macron's French presidential victory to bet on whether he will be able to push through economic reforms.

The European single currency reached $1.1023, the highest level since November, at around 2030 GMT Sunday after it became clear that the pro-EU former investment banker Macron had won. However, the euro soon fell back and stood at $1.0923 in late afternoon trading.

The Paris stock market meanwhile ended the day down 0.9 percent. Frankfurt slipped 0.2 percent while London, outside the eurozone, edged up 0.05 percent.

"Market reaction to Emmanuel Macron's victory over the weekend has definitely been a case of buy the rumour and sell the news, with the euro unable to build on the gains of last two weeks and the CAC40 slipping back after initially opening higher," said Michael Hewson, chief market analyst at CMC Markets.

"While the sense of relief is palpable amongst European leaders, markets have moved on and shifted their focus to the likelihood that the new French President will be able to enact his reform programme, one of which is to pledge to reduce unemployment to 7 percent, a level only seen once in the last 30 years, at the beginning of 2008," he added.

Macron, 39, has proposed an ambitious domestic reform agenda including cutting state spending, easing labour laws, boosting education in deprived areas and extending new protections to the self-employed.

But he is inexperienced, has no political party and must fashion a working parliamentary majority after legislative elections next month.

"Yesterday's election of centrist liberal Emmanuel Macron as the next French President bodes well for the revitalisation of France's lacklustre economy and the European project more generally," said Jessica Hinds of Capital Economics.

"But he will encounter plenty of opposition and may have to water down his growth-boosting reforms."

Wall Street also moved lower, with the Dow dipping 0.1 percent in late morning trade.

- Asian rally -

Earlier Monday, Asian stock markets mostly rose following Wall Street's rally Friday as dealers cheered a strong US jobs report.

Markets had been given a positive lead from New York. All three main US indices ended with healthy gains Friday, with the Nasdaq posting yet another record, following a better-than-expected jobs reading.

The US economy added an estimated 211,000 net new positions in April while the unemployment rate fell to 4.4 percent, the lowest since May 2007, the Labor Department reported.

The reading further strengthens prospects the Federal Reserve will stick to a planned course of two more interest rate rises this year.

Tokyo's Nikkei index, which closed for much of last week for Japanese holidays, ended Monday with a gain of 2.3 percent, reaching a 17-month high after playing catch-up.

Hong Kong won 0.4 percent and Sydney put on 0.6 percent by the close.

Seoul surged 2.3 percent to a fresh record high, the day before a presidential election to find a successor to the impeached Park Geun-Hye.

However, Shanghai closed down 0.8 percent, with traders unimpressed by data showing China's exports and imports rose less than expected last month and slowed from March.

The market has also been hit by concerns about government moves to crack down on leveraged investing that was fuelling instability.

Energy firms from Australia to Hong Kong also bounced after Friday's sharp losses, as traders tracked steadier oil prices, which on Friday hit five-month lows on fresh fears of a supply glut.