European shares fell sharply after the Syriza party claimed victory in Greece's election. But as Katie Gregory reports the bad news didn't last long, with markets still bolstered by last week's ECB QE announcement and fresh hopes that Greece's new leader will end the country's debt crisis.
The outcome was not a surprise... but European markets still took an early hit after the leftist Syriza party claimed victory in the Greek election. At one point the Athens ATG was down around 5% Other European markets saw similar early falls, and the euro tumbled to an 11 year low against the dollar. But none of the losses lasted long, Syriza's strong result at the polls and quick coalition agreement with the Independent Greek's party - prompting a rebound. Yields on lower-rated euro zone bonds, in Italy, Spain and Portugal - did bounce off record lows. But BGC's Mike Ingram says last week's cash injection from the ECB proved a strong enough ballast. (SOUNDBITE) (English) BGC PARTNERS, MARKET ANALYST, MIKE INGRAM, SAYING: "Considering the seismic nature of the election result in Greece, market reaction has actually been relatively muted this morning and it comes off of course on the back of a seven day rally in euro stocks equities." Germany's DAX didn't just rebound - it reached a record high. That's despite many in the country insisting Greece must pay its debts and the win by anti-austerity party - Syriza - leaves that very much up in the air. In Greece, the celebrations are continuing. But with the hopes of a nation now riding on new leader Alexis Tsipras to erase their debt issues... he has a big job ahead. (SOUNDBITE) (Greek) STUDENT MARIOS SKEVAKIS, 18, SAYING: "I don't think this is a positive outcome for the country but I'm also not sure. I don't know because I haven't seen what Syriza can do and will do." (SOUNDBITE) (Greek) LAWYER GEORGIA CHRISTOU, 38, SAYING: "I think it inspires hope, it inspires change. I'm not at all certain that they have what it takes to achieve what they say they will, but let them try, give a chance to young people so that they can do something better." While the election outcome had been widely factored in by investors, any renegotiation of Greece's debt will have an impact on the euro zone. And if Tsipras does not get his way - there's still a chance Greece will pull out of the region altogether.