Despite concerns over Greece's future in euro, markets shrug off election victory of Syriza


We also have more stories about:
(click the phrases to see a list)




Photo Gallery:

Click to view (4 Photos)

LONDON — Global financial markets shrugged off the election victory of an anti-austerity party in Greece, with most investors appearing to conclude on Monday that it is unlikely to lead the country to fall out of the euro.

KEEPING SCORE: In Europe, Germany's DAX was up 0.7 percent at 10,729 while the CAC-40 in France rose 0.1 percent to 4,645. In Greece, the main stock market recouped half of its early losses to trade 2.3 percent lower, a sign that investors are not as jittery as they may have been in the initial aftermath of Syriza's election victory. The FTSE 100 index of leading British shares was down 0.5 percent at 6,801, underperforming its main European peers partly because Britain isn't in the 19-country eurozone. Wall Street was poised for a subdued opening with Dow futures and the broader S&P 500 futures down 0.2 percent.

GREEK ELECTION: The main focus in markets was Sunday's victory by Syriza, a left-wing party that has vowed to end Greece's painful austerity policies. Alexis Tsipras, the party leader, promised to end "humiliation and pain" that Greece has endured since a 2010 international bailout imposed harsh spending cuts. Tsipras was quick to form an alliance with the right-wing but similarly anti-austerity Independent Greeks, as his party fell just short of a majority.

ANALYST TAKE: "The fact that Greece has voted against austerity is of little surprise, and European equity markets have managed to hold their own," said Alastair McCaig, market analyst at IG. "It is what Syriza does next that will impact whether the last couple of weeks' gains can be held or not."

EURO STEADIES: Despite a brief foray to fresh 11-year lows, the euro has recovered its poise to trade above $1.12, in another sign that traders don't foresee a chaotic Greek exit from the euro. "While nothing can be ruled out, including a Greek exit from the euro, a mutual mistrust of the unknown means that a compromise ... is still the more likely outcome," said Simon Derrick, chief currency strategist at Bank of New York Mellon.

ENERGY: Oil markets weren't negatively impacted by Syriza's win. Benchmark U.S. crude was up 20 cents at $45.79 a barrel in electronic trading on the New York Mercantile Exchange. The price of oil has fluctuated since the death of Saudi Arabia's King Abdullah late last week. Analysts said the king's death is unlikely to change Saudi's oil production levels, a key factor in the global prices, but it has created a small amount of additional uncertainty that has unsettled markets.

ASIA SCORECARD: Most Asian markets narrowed their early losses with Chinese stocks turning higher. Japan's Nikkei 225 finished 0.3 percent lower at 17,468.52 and South Korea's Kospi was flat at 1,935.68. Hong Kong's Hang Seng closed 0.2 percent higher at 24,909.90 and China's Shanghai Composite jumped 0.9 percent to close at 3,383.18.

All content copyright ©2015 Daily Journal, a division of Home News Enterprises unless otherwise noted.
All rights reserved. Click here to read our privacy policy.