French stocks hit a nine-year high on Thursday morning as investors grow confident that Emmanuel Macron will become the next president of France.
But market analysts believe that the CAC 40 has further to go if the centrist and independent candidate wins Sunday's vote.
A Macron victory is the most "market-friendly" scenario, given his pro-European stance, Vincent Juvyns, global market strategist at JPMorgan Asset Management, told CNBC over the phone.
He suggested that banking stocks are likely to outperform following a confirmation of Macron's victory.
A Macron win would also "open the door to a change in tone at the European Central Bank level," Juvyns added.
If Macron wins against the far-right candidate Marine Le Pen, the integrity of the euro zone should be intact. In opposition to Le Pen's policy proposals, Macron wants to strengthen the euro area, which could boost claims that it is time for the ECB to tighten.
Claus Vistesen, chief euro zone economist at Pantheon Macroeconomics, told CNBC that if Macron wins, the ECB is likely to change its forward guidance at its June meeting. He said that the ECB could open the door to raising rates before the end of its quantitative easing program.
Vistesen added that there will be a relief rally on Monday, with banking stocks likely to jump, but a Macron win has already been priced in. "I would not be surprised if markets open higher and go down at lunchtime," he said, "I would not be surprised if everything ends the day in red," Vistesen added.
"I would not be surprised if markets open higher and go down at lunchtime," he said, "I would not be surprised if everything ends the day in red," Vistesen added.
Disclaimer: Vincent Juvyns doesn't run a portfolio but JP Morgan owns some banking stocks in some European equity portfolios.