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Greek confidence vote leaves markets nervous | |
(about 3 hours later) | |
Asian shares closed higher after the Greek government won a crucial confidence vote, but European stock markets have opened less strongly. | |
Leading shares in London and Paris fell slightly at the start of trading, while Frankfurt was flat. | |
Earlier, Asian shares rose on hopes that Greece will avoid a default, after Prime Minister George Papandreou's new cabinet was approved in parliament. | |
Japan's Nikkei 225 index gained more than 1.9%. | |
In Wednesday trading, the euro, Europe's shared currency, was trading at $1.44, down from the $1.4435 it hit after the vote result, but well up on the $1.4073 it touched last week. | |
It was barely changed across the rest of the currency trading board. | |
Analysts said that although there remained many questions to answer about the Greece's future, the focus had shifted to monetary policy in the US. | |
Later on Wednesday, the president of the US Federal Reserve, Ben Bernanke, was due to give a news conference, his second ever. | |
Lloyds Bank analyst Adrian Schmidt said: "The [Greek] focus now passes to the budget passage and implementation, which is more contentious. | |
"This could be damaging for the euro, but for today, it seems the focus will be more on the US." | |
The UK market was also concerned with its own economic issues, as the Bank of England's interest rate-setting committee released the minutes of its latest monthly meeting. | |
They showed a majority of seven voting to keep rates on hold at 0.5%, with two voting against. | |
'Sigh of relief' | 'Sigh of relief' |
Some market commentators said the fact the Greek government won the confidence vote meant that the markets had one risk factor fewer to worry about. | |
"On a short-term basis, markets are breathing a sigh of relief," said Kelvin Tay of UBS bank. | "On a short-term basis, markets are breathing a sigh of relief," said Kelvin Tay of UBS bank. |
"You are seeing that reaction across the Asian markets," he added. | "You are seeing that reaction across the Asian markets," he added. |
However, Mr Tay warned that given the extent of the problems in Greece, the current solution was not sufficient to solve them. | However, Mr Tay warned that given the extent of the problems in Greece, the current solution was not sufficient to solve them. |
"We believe that for the solution to be found, there needs to be a Greek debt restructuring," he said. | "We believe that for the solution to be found, there needs to be a Greek debt restructuring," he said. |
"This solution will only last them for the next 12 months," Mr Tay added. | "This solution will only last them for the next 12 months," Mr Tay added. |