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Risk assets rallied in the Asian trading session on Monday following the victory for the pro-bailout New Democracy Party in the second Greek election.
Markets in Japan, South Korea and Australia all rallied around 1.8% as investors breathed a sigh of relief that left-wing parties had failed to come out on top at Sunday's elections.
S&P 500 futures gained 0.5 percent, while oil rallied $1.27 a barrel. The Euro got a boost, strengthening to 1.2726 against the greenback, but then fell back soon after.
Despite not winning a clear majority, New Democracy, led by Antonis Samaras, will be able to form a coalition government in Greece after beating off competition from the radical leftist SYRIZA party.
“This will inspire a market rally as the New Democracy Party and the socialist PASOK party move to form a coalition,” Megan Greene, the director of European Economics at Roubini Global Economics told CNBC.com on Sunday.
“New Democracy has won, it is a done deal. Moreover, they should be able to form a government with PASOK with a decent majority, which is risk positive,” said Thanos Vamvakidis, the head of European G10 FX strategy at Bank of America Merrill Lynch in London
But analysts said the risk-on trade may not last long.
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