Stocks slip, euro dips on Greece poll shock

Markets jittery as leftist election victory stokes concerns of instability throughout Europec

The euro skidded to an 11-year low and stock prices fell on Monday as Greece's leftist Syriza party promised to roll back austerity measures after sweeping to victory in a snap election, putting Athens on a collision course with international lenders.

The euro fell to an 11-year low of $1.1098 on the vote outcome before recovering to $1.1186, still down 0.2 percent from last week.

The election was the second blow since last week for the euro, still smarting after the European Central Bank unveiled a huge bond-buying stimulus programme.

At 0803 GMT, the FTSEurofirst 300 index of top European shares was down 0.3 percent at 1,475.49 points.

As concerns grew that the Greek election results could lead to renewed instability in Europe, US stock futures fell 0.5 percent in Asia. Japan's Nikkei closed down 0.3 percent, and MSCI's broadest index of Asia-Pacific shares outside Japan was also off 0.3 percent

Safe-haven assets were in favor, with the 30-year US bonds yield hitting a record low of 2.336 percent. The 10-year notes yield fell 5 basis points to 1.759 percent.

The Swiss franc rose 0.4 percent to 0.87684 to the dollar while the yen edged up to 117.60 to the dollar.

Syriza leader Alexis Tsipras is set to form the first eurozone government that is openly opposed to bailout conditions imposed by the European Union and International Monetary Fund during the economic crisis.

Renegotiating with other eurozone governments could even raise the risk of Greece eventually leaving the currency union, though most market players expect Tsipras to eventually make compromises to avoid the so-called "Grexit".

Indeed, the broad consensus in the markets is that any renewed tensions over Greece are unlikely to hurt broader investor sentiment much beyond an initial shock.

Unlike at the height of the debt crisis in 2011-12, European banks now have limited exposure to Greece, and European policymakers have frameworks to deal with indebted countries, analysts say.

"At the moment, the market believes that if there is any (debt) restructuring it would only involve the official sector and for now, the possibility of Greece leaving the eurozone even with the incoming government is small," said Sebastien Galy, senior foreign exchange analyst at Societe Generale in New York.

The ECB's plan to pump more than a trillion euro into the banking system in the coming year and a half is underpinning risk sentiment, which boosted European share prices to seven-year highs on Friday.

On the other hand, US stocks slipped on Friday, partly because strength of the dollar dented the allure of the relatively sound US economy.

"Economic data out of the US seems to have lost a little bit of momentum lately. Quietly the impact of a strong dollar is starting to appear," said Tohru Yamamoto, chief strategist at Daiwa Securities.

The dollar rose more than 5 percent so far this year against a basket of major currencies, hitting the highest level since 2003.