* Pan-European index up 1.7 pct
* French blue chips lead rally
* Banks, industrials top sectoral gainers
* Investor anxiety gauge slumps
(Adds details, updates prices)
By Danilo Masoni
MILAN, April 24 Banks rallied, powering European
shares to their highest levels in more than a year, while
volatility and safe-haven gold stocks slumped on Monday on
abating political anxiety in the euro zone.
Investors cheered the first-round results of France's
presidential election in which centrist Emmanuel Macron took a
big step towards leading his country, with polls now putting him
comfortably ahead of far-right leader Marine Le Pen in the May 7
The outcome lessens the risk of an anti-establishment shock
on the scale of UK's vote to quit the European Union and
bolsters the case for closer ties between France and Germany.
"The risk of a europhobic president has been lifted for
markets. I think there will be a period of relief," said Pascale
Auclair, global head of investment at La Francaise Asset
Europe's main gauge of equity market anxiety, the Euro STOXX
50 Volatility index fell 7 points, wiping out the rapid
surge it made this month when investors grew cautious in the run
up to the French vote.
Shares in French companies and banks saw the biggest gains
across the region with the euro zone's bank index rising
more than 5 percent to its highest level in 16 months and Paris
blue chips hitting their highest since April 2015.
"French banks alongside European banks will likely be the
biggest winners," said UniCredit analysts in a note.
Europe's STOXX 600 index was up 1.7 percent by 0826
GMT, while UK's FTSE added 1.6 percent and Germany's DAX
was up 2.6 percent.
The top six gainers on the pan-European index were banks
with Commerzbank, Societe Generale and
UniCredit leading the way, all up more than 8 percent.
Brokers including Goldman Sachs, Citi and Kepler Cheuvreux
all came out heavily in favour of European banks on Monday
Industrials were also in demand with shares in French
construction companies Saint-Gobain and Vinci
soaring 6.4 percent and 5.5 percent respectively, as
investors turned their focus to their earning prospects.
"There was already a case for this sector before the
election, but now we are looking beyond and back to
fundamentals," says Vincent Juvyns, global market strategist at
JP Morgan Asset Management.
The broader rush into risky assets weighed on precious metal
miners Randgold Resources and Fresnillo which
fell 4.1 percent and 2.6 percent respectively, as prices of
gold, seen as a safe haven asset, fell more than 1 percent to
their lowest in nearly two weeks.
Next up on investors' radars will be the slew of results
poised to kick off European earnings season this week including
heavyweight banks UBS and Credit Suisse.
European first-quarter earnings are expected to rise 7.2
percent, according to Thomson Reuters I/B/E/S data. Excluding
the energy sector, this would be a rise of 2.9 percent.
Meanwhile, some results on Monday cheered investors.
Philips rose 3.2 percent after the maker of medical
devices and healthcare products beat expectations, while results
at Swedish telecoms firm Tele2 were also stronger
than expected, sending its shares up 7.2 percent.
(Reporting by Danilo Masoni; Editing by Jon Boyle)