While you were sleeping: Stocks surge as France votes for centrist president

World stockmarkets surged in the wake of the first round of the French presidential election and investors renewed their appetite for risk.

On Wall Street, at the close of trading the Dow Jones Industrial Average rose 216.13 points, or 1.0%, to 20,763.89. The S&P 500 jumped 1.1% to 2374.15, while the Nasdaq Composite climbed 1.2% to a new record high of 5983.82.

Financials were the biggest gainers in the S&P 500, rising 2%. Morgan Stanley soared 3.7% and Bank of America gained 3.8%. In the Dow, JP Morgan Chase rose 3.8% and Goldman Sachs added 3.2%.

Gold, the common hedge against instability, fell 0.9% to $US1275.80 an ounce, its largest one-day decline since early March.

Government bonds also sold off in the US, Germany, the UK and Japan. The yield on the 10-year USTreasury rising to 2.268% from 2.234% on Friday.

The CBOE Volatility Index, or VIX, a measure of anticipated stock-market volatility sometimes called the “fear gauge,” fell 24%.

Risk-on returns
“Today the market is enjoying a risk-on trade,” Quincy Krosby, a market strategist for Prudential Financial told Dow Jones.

The reporting season continues with quarterly earning due from Caterp[illar, McDonald's, Microsoft, Amazon.com and Exxon Mobil.

A strong series of reports could give the US stock market the jolt it needs to break out of its recent trading range, said Philip Blancato, president and chief executive of Ladenburg Thalmann Asset Management.

“For it to go substantially higher, you need a good earnings season,” he said.

But risk sentiment is expected to be tempered by the prospect of a looming deadline to avoid a US government shutdown.

On the positive side, President Donald Trump has ordered a speed up in the release of a tax plan that could take corporate rates as low as 15%.

French stocks hit record
European markets rallied after Emmanuel Macron won the first round of Sunday’s vote in France, knocking leftist Jean-Luc Mélenchon and conservative François Fillon out of the running.

Mr Macron will compete against National Front leader Marine Le Pen, who campaigned to take France out of the euro, in the second round on May 7.

France’s CAC 40 index surged 4.1%, its largest one-day jump since 2012, while Germany’s benchmark DAX index added 3.4% to notch a fresh record.

The euro was last up 1.3% at $US1.0860 after touching a five-month high on Sunday.