European markets breathe sigh of relief

European stock markets opened higher on Monday following the results of Greece’s re-run election, which saw pro-bailout parties win a slim parliamentary majority.

The DAX in Frankfurt and Paris’ CAC indices climbed 1.3 percent. Madrid opened nearly 2 percent up while the Milan bourse started the day more than a percentage point higher.

Analysts say Sunday’s election result has eased concerns that Greece would leave the eurozone – at least for now. But traders warned that the rally may be short-lived though as the eurozone crisis increasingly focuses on the economies of Spain and Italy.

Spain’s borrowing costs crossed the 7 percent mark on Monday, which most analysts say is unsustainable given its debt levels. Italy’s rose again past 6 percent.

Meanwhile the euro gained more than 0.5 percent against the US dollar, its highest level in a month.

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