By Marie Maitre and Sudip Kar-Gupta

PARIS (Reuters) - Conservative Nicolas Sarkozy's comfortable election win looked set to appeal to reform-hungry French markets on Monday, but investors said the presidency would take a backseat to burgeoning merger activity.

"French CAC-4O (blue chip company) leaders were for Sarkozy. His victory had been widely expected by the market," said Francois Garner, fund manager at HMG Finance in Paris.

"It will not have a significant impact on the CAC-40 stock market, which has been mainly rising on the back of merger and acquisition activity, but his victory should satisfy the market," he added.

France's benchmark CAC-40 index closed up 1.1 percent at 6,068.83 points on Friday, its highest level since late 2000.

The stock market has risen mainly on the back of a wave of merger and acquisition activity, such as bid sagas involving French bank Societe Generale, public works and transport concession group Eiffage and car parts maker Valeo.

"Sarkozy's victory could help see a rise in the CAC-40 index," said David Buik at financial spread betting company Cantor Index.

Analysts cautioned that more time may be required to gauge the full impact of Sarkozy's victory on French stocks as investors wait to see if pledged reforms are implemented.

Parliamentary elections in June will be key to giving Sarkozy the leeway to implement market-friendly measures such as increased labour flexibility or reduced taxes and social charges.