Equities in Asia were mixed on Monday, with most markets trading higher on the results of the first round of the French presidential elections although Chinese stocks had their worst day of the year.
Centrist candidate Macron won 23.7 percent of the votes in the first round of the election on Sunday while National Front leader Le Pen secured 21.7 percent, according to estimates.
"While the increased popularity of the centrist candidate (Macron) is not a strong market driver, a collective sense of relief that the global economy is over another hurdle should see a risk on rally in Asia Pacific trading today," CMC Markets' Chief Market Strategist Michael McCarthy noted.
The euro stabilized against the dollar to trade at $1.0864 at 2:15 pm HK/SIN. The euro had earlier traded at a five-month high of close to $1.0935 against the dollar, compared to Friday's close around the $1.072 handle. The euro also made gains against the yen, trading higher at 119.74 yen.
"Euro/dollar has gapped much higher because we do not have the worst case scenario for the market. We may knock the level of $1.10 or possibly even $1.11 but this trade may fade as Le Pen is still there. This is going to keep traders on the sidelines," ThinkMarkets' Chief Market Analyst Naeem Aslam said in a Monday morning note.
Mizuho Senior Economic Vishnu Varathan agreed that it might be too soon to look past political risks in France.
"(I)t may be premature to be seduced by the 'ooh la la' headlines of the French polls ... (as) the final outcome of the French elections remains fairly wide open," Varathan said in a note, adding that Macron's lead could be overstated. Varathan also highlighted how the surge in the euro above the $1.09 handle has since faded.
Japan's benchmark Nikkei 225 index surged 1.37 percent or 255.13 points to close at 18,875.88 on the back of the French polls while the Kospi gained 0.4 percent or 8.7 points to close at 2,173.74. The ASX 200 was higher by 0.3 percent or 17.66 points to close at 5,871.8.
Equities in mainland China turned in their worst performance of the year, with the down by about 1.4 percent. The Shenzhen Composite plunged 2.44 percent or 46.8516 points to finish at 1,873.3734.
Losses in stock indexes on the mainland come after Chinese media stated that the government would endure greater levels of volatility as regulators tackled shadow banking, Reuters reported.
Hong Kong's benchmark initially traded lower following the drop in Chinese shares but later shrugged off the negative sentiment to trade 0.45 percent higher.
Geopolitical tensions in the Korean peninsula took a backseat even though tension continued to ramp up. Over the weekend, North Korea arrested an American citizen in Pyongyang and indicated that it was prepared to sink a U.S. aircraft carrier.
Japanese Prime Minister Shinzo Abe also spoke with U.S. President Donald Trump about North Korea over the phone earlier today, with a separate call between Trump and Chinese President Xi Jinping also held.
In other currency news, the dollar index traded at 99.07, creeping up from the 98 handle seen earlier in the session. The greenback, however, was stronger against the safe-haven yen and off the 108 handle seen in the last two weeks. Dollar/yen last traded at 110.19. The risk-sensitive Aussie dollar traded at $0.7559.
On the energy front, oil prices crept up slightly after falling at least 2 percent on Friday although U.S. crude remained just below the $50 a barrel mark. U.S. West Texas Intermediate (WTI) crude was 0.6 percent higher at $49.92 while Brent crude traded up by 0.64 percent at $52.29.
In corporate news, Hong Kong jeweler Chow Tai Fook's acquisition of Australian utilities company Alinta Energy was approved by Foreign Investment Review Board in Australia. Investors had been watching if regulators would clear the deal after Chinese investment in Australian electricity grid Ausgrid was blocked last August. Chow Tai Fook shares were lower by 1.54 percent.
Stateside, U.S. stock futures opened sharply higher on the back of the French election polls, with Dow futures soaring nearly 200 points earlier in the session. S&P and Nasdaq futures were both higher by around 1 percent. Wall Street had closed lower across the board last Friday.
— CNBC's Fred Imbert contributed to this report.