April 20, 2017 / 9:51 AM / 8 months ago

French stocks outperform, euro rallies

LONDON, April 20 (Reuters) - With less than 24 hours of trading to go before the first round of the French presidential election, a likely squaring of positions on Thursday saw the euro rally, French banking spike higher and government bond spreads narrow.

The euro rose 0.6 percent while a rally in banking stocks lifted France’s CAC 40 up 1 percent easily outpacing broader European markets.

BNP Paribas and Societe Generale shares both rose more than 2 percent and Credit Agricole rising 1.4 percent.

Centrist Emmanuel Macron held on to his lead as favourite to emerge as the eventual victor in the French presidential election, a closely watched poll showed, although it indicated that the outcome of the first round of voting on Sunday was too close to call.

But in another sign of easing jitters over the election, the premium investors demand for holding French government bonds over top-rated German peers narrowed to its tightest level in almost two weeks at around 65 basis points . (Reporting by Helen Reid and Dhara Ranasinghe, Editing by Vikram Subhedar)

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