European stocks and euro tiptoe higher after French election

Traders are also weighing their strategies after last week’s US presidential debate. Morgan Stanley strategists say equity investors 'should stay selective' and maintain a bias toward quality US stocks

Exit polls showed Marine Le Pen's National Rally (RN) winning around 34% of the vote, comfortably ahead of leftist and centrist rivals. Picture: Aurelien Morissard/AP

European stocks as well as the euro staged a nervous rally on Monday as the far right took a smaller lead in the first round of France's election than some expected, suggesting a hung parliament could result and hamper the party's agenda.

The election has unsettled markets as both the far right and the left-wing alliance that came second have pledged heavy spending at a time when France's high budget deficit has already prompted the European Commission to recommend disciplinary steps.