LONDON - European stock markets slumped on Monday after Greece failed to elect a president and headed for a snap election that could derail the country's austerity measures.
While Europe's main indexes saw modest drops, Athens stocks fell sharply, losing more than 11 percent after the failed presidential vote before closing down 3.91 percent.
In mid-afternoon deals, London's benchmark FTSE 100 index slid 0.14 percent to 6,600.45.
Frankfurt's DAX 30 lost 0.78 percent to 9,844.77 points and the CAC 40 in Paris dipped 0.60 percent to 4,270.09 compared with last Wednesday's closing level.
Analysts said the result of the Greek vote had affected markets, but not nearly as much as it would have a few years ago.
The snap poll has raised fears that the election could bring a radical left-wing party to power that would roll back austerity measures.
The result, while not really unexpected, has spooked the markets, although not as much as it would have at the height of the eurozone crisis, Craig Erlam, market analyst at Alpari, wrote in a research note.
As we can see from the reaction in the markets, investors are still worried about the risk of contagion, particularly when it comes to countries like Spain and Italy which are seen as being very fragile, but the risks are much lower than they were a few years ago.
Spain's IBEX 35 index was down 2.16 percent in mid-afternoon trading, while Milan's MIB lost 1.66 percent.
At the same time, yields on 10-year bonds for Germany and France, seen as safe-haven investments, fell to historic lows. Germany's dropped to 0.552 percent before climbing slightly, while France's fell briefly to 0.841 percent.
Greek borrowing rates soared, with its 10-year yield climbing in the wake of the failed vote to 9.55 percent from 8.50 percent at Wednesday's close.
In a further sign of the Greek vote's limited impact however, the euro gained ground, climbing to $1.2207 compared with $1.2179 late in New York on Friday.
In recent days, European Commission President Jean-Claude Juncker and German Finance Minister Wolfgang Schaeuble have warned the Greeks not to change course and abandon the reforms.
The European Union and the International Monetary Fund have overseen two massive international bailouts for Greece. The IMF said it was suspending its aid to Greece until a new government is formed after elections.
AFP
