The far-right Rassemblement National (RN) was on course to win the most seats in France's legislative elections but it was uncertain whether it would win an absolute majority
The far-right Rassemblement National (RN) was on course to win the most seats in France's legislative elections but it was uncertain whether it would win an absolute majority AFP

The euro and global equity markets rose Monday amid signs France's far right would not win enough seats for an overall majority in legislative elections.

The far-right National Rally (NR) party of Marine Le Pen won a resounding victory in the first round of the polls Sunday, with President Emmanuel Macron's centrists trailing in third behind a left-wing coalition.

But the key question ahead of the second round on July 7 was whether the RN would win an absolute majority in the new National Assembly.

"The French election results have led to a sigh of relief from financial markets," noted Kathleen Brooks, research director at XTB trading group.

"The market is experiencing a relief rally that NR looks unlikely to achieve an absolute majority," said Fiona Cincotta at

"This result had been considered the worst-case scenario, given fears of high fiscal spending and mounting debt levels, which had pulled stocks and, particularly, banks lower heading into the first round of the election."

Macron and his allies have begun a week of intense campaigning ahead of the second round of legislative elections to prevent the NR from taking an absolute majority and control of government in a historic first.

A hung parliament could lead to months of political paralysis and chaos, analysts say.

It could meanwhile "reduce the chance of a big spending splurge, but wouldn't exactly help sort France's fiscal position, which is already quite fragile", said Neil Wilson, chief market analyst at Finalto.

Two hours from Monday's close, the Paris CAC 40 index was up 2.0 percent having opened up around 2.5 percent.

Frankfurt also advanced, adding around 0.7 percent after Germany's official inflation rate slowed more than expected in June, in welcome news for the European Central Bank following last month's first interest rate cut since 2019.

Wall Street also was in the green, the Dow adding 0.7 percent minutes into the session.

London rose modestly in midday deals as Britain gears up for its own general election on Thursday, with the main opposition Labour party on course to end 14 years of Conservative rule.

The Tories, led by Prime Minister Rishi Sunak, have trailed badly in polls throughout the campaign.

The pound gained against the dollar, which took a knock from cooler US inflation data last Friday.

This has increased the chances of the Federal Reserve cutting interest rates this year.

"The door to a September cut is wide open," said Taylor Nugent at National Australia Bank.

He cautioned, however, that several releases on US inflation and jobs data before then could affect the outcome.

New York - Dow: UP 0.8 percent at 39,418.34

Paris - CAC 40: UP 2.0 percent at 7,626.73 points

London - FTSE 100: UP 0.6 percent at 8,209.45

Frankfurt - DAX: UP 0.7 percent at 18,358.58

EURO STOXX 50: UP 1.2 percent at 4,952.51

Tokyo - Nikkei 225: UP 0.1 percent at 39,631.06 (close)

Shanghai - Composite: UP 0.9 percent at 2,994.73 (close)

Hong Kong - Hang Seng Index: Closed for holiday

Euro/dollar: UP at $1.0755 from $1.0713 on Friday

Pound/dollar: UP at $1.2680 from $1.2644

Euro/pound: UP at 84.82 pence from 84.71 pence

Brent North Sea Crude: UP 0.8 percent at $85.69 per barrel

West Texas Intermediate: UP 0.7 percent at $82.14 per barrel