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FTSE Stable as Macron Wins French Presidency

Tue, 21st May 2019

The FTSE 100 remained stable during the first half of Monday’s trading, as markets responded to the news that Emmanuel Macron would be the next French president.

Mining shares struggled, but European equities were otherwise strong on the news of the market-friendly candidate’s appointment. By lunch time, the FTSE 100 was up by 0.1 percent, after having wavered in and out of negative territory all morning.

The question now is whether Macron will be able to deliver on his promises over the long term. His effectiveness will depend on the coming parliamentary elections, and the mandate that he is able to secure. There is the risk that France could come out of the June elections with a fragmented parliament.

Mining shares struggled after a disappointing trading update from China weighed on the index. The sector is quite sensitive to economic data coming out of the country, as China is one of the world’s biggest consumers of both basic materials and precious metals. Chinese exports increased by eight percent in April, but this was short of the ten percent increase that economists expected to see. Imports are up by 11.9 percent, which is also below forecasts. March had seen imports increase by 20.3 percent. The Chinese trade surplus is currently at $38.05 billion, an increase from $23.93 billion during the previous month.

Shares in Anglo American, Fresnillo and Rio Tinto all fell during the morning’s trading. British Gas parent company Centrica also made some losses, after announcing reports in-line with previous guidance, including plans for cost cutting.

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