No 'Drachmageddon' but relief rally ends

As relief rallies go - this one was especially brief.

Investors were always going to be pleased that Greeks voted for pro-bailout parties in Sunday's election.

But their relief didn't even last the morning.

Markets aren't only concerned about Greece.

The borrowing costs of other indebted countries, Italy and Spain, rose again - and Spain's 10-year government bond yield once again hit a euro-era high over 7 percent.

David Jones is from IG Index.

SOUNDBITE: David Jones, IG Index, saying (English):

"We saw the markets start quite a bit higher, round about 100 points the FTSE100, where we closed on Friday, but some of that initial euphoria starting to fade."

By mid-morning, Athens' stock exchange was almost 6% higher - most of the other European indices were flat.

After the elections, investors are focussing again on Greece's problems - and Spain's.

A real solution to the euro zone crisis is still lacking says Simon Derrick from Bank of New York Mellon.

SOUNDBITE: Simon Derrick, Head of Global Currency Research, Bank of New York Mellon, saying (English):

"If you look at the performance of the euro already this morning, it's faded away somewhat from the highs we saw in Asia. The problem is that the rhetoric is great that's come out from the weekend, the immediate problem or the immediate threat of Greece leaving the has been put off but there's still so much detail that needs to be dealt with. Most immediately we need to see about the negotiations between the troika and the new government, how ever that's composed, about exactly whether there's going to be any relenting on the austerity measures that have been agreed."

As Greece's pro-bailout parties begin trying to form a coalition, the country faces a daunting struggle to revive its near-bankrupt economy.

Greeks and some analysts are calling for the country's international lenders to offer Athens some flexibility on payment timings, or even to ease the bailout terms.

The pressure is on for Greece's new government to start governing, as it will reportedly run out of money in the middle of July.

Joanna Partridge, Reuters