18.06.2012
By Simon Miller
European markets are expected to echo Asian markets when they open this morning after pro-austerity pact party New Democracy emerged as the largest party following the Greek election.
Asian markets opened up with the Hang Seng climbing 1.6% to 19,548.40 as of 09.39 HK time and is currently trading at 19,532.16 (05.27BST). The Nikkei 225 index was trading 2.23% up at 8,760.09 and try Hang Seng China Enterprise Index Rose 1.8% to 9,921.37.
However, any rally could be short-lived as New Democracy struggles to form a coalition government. With more than 99% of try votes counted, the party won 29.7% ((129 seats) while anti-treaty party Syriza came second with 26.9% (71 seats). Former government coalition partner Pasok won 12.3% (33 seats).
The Syriza leader Alexis Tsipras said that although he would help the government in alleviating the burden on the people, he refused to join a government of 'national unity' warning that "anti-austerity is the only viable solution".
Pasok's leader Evangelos Venizelos had proposed a government made up of a coalition of New Democracy, Syriza, Pasok and The Democratic Left.
"No decision can be take without this national unity," he said.
Barry Norris, partner at Argonaut Capital Partners commented: "After initial relief, markets are likely to remain in wait-and-see mode and are likely to realise this Greek election result is unlikely to be a significant turning point. Southern Europe and Eurozone banks remain too risky. Blue-chips with strong balance sheets, superior business models and attractive dividends remain the stand-out investment in financial markets."
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