WASHINGTON — A slim victory for pro-Europe parties Sunday in an election in Greece should relax fears that the country might leave the euro and unleash global financial turmoil.
But when it comes to Greek politics — and European economic policy — it’s never that easy. The bumpy ride for financial markets isn’t over yet.
The conservative New Democracy party, which supports a bailout agreement that would keep Greece in the 17-country euro club, appeared to win enough votes to form a ruling coalition.
The result forestalled what financial analysts had most feared — a victory for Syriza, a leftist party that wanted to cancel the terms of the bailout, speeding Greece toward an exit from the euro and the world economy toward an unpredictable shock.
Dow Jones industrial average futures were up 85 points Sunday night, suggesting the market could open higher today. But analysts cautioned that any surge is likely to be brief.
Neil MacKinnon, global macro strategist at the investment bank VTB Capital, told his clients that the election result, combined with a Federal Reserve meeting this week at which investors hope for measures to stimulate the U.S. economy, could lift stocks.
MacKinnon cautioned, however, that there are still too many problems in Europe, particularly in Spain, plus evidence that the global economy is cooling, to justify a celebration.
“I think investors should treat any sort of knee-jerk rally with caution,” MacKinnon said.
