European stock markets slashed gains in morning trade on Monday, as a relief rally following the Greek election results proved short-lived with investors worrying that the euro-zone crisis was far from over. The Stoxx Europe 600 index (XX:SXXP) +0.06% lost 0.1% to 243.99, coming down from 246.96 earlier in the session. Global markets initially rallied following preliminary results from the Greek parliamentary election held on Sunday, which put pro-austerity New Democracy on top with 29.7% of the votes. Ahead of the election, market participants worried that a victory for Syriza, which wanted to renegotiate the bailout terms with Greece's international lenders, would lead to a Greek exit of the euro and potentially a breakdown of the shared currency. However, New Democracy needs to gather support to form a governing coalition after gaining 129 seats out of the 151 seats it needs to lead the 300-seat government. “The Greek election result still leaves the parliament in a state of uncertainty with no clear majority and the two largest parties having opposing views towards austerity," Dieter Merz, chief investment officer at MIG bank, said in emailed comments. “Longer term, Greece remaining in the euro is also likely to cause more problems with the need for further bailouts." “This may act as a short-term diversion from the bigger elephant in the room, Spain," he added. Pressure returned to Spain's IBEX 35 index after it posted a 2.6% gain last week. The Spain benchmark (XX:IBEX) -1.15% lost 1.7% to 6,604.90, as banks were on the decline. Bankia SA (ES:BKIA) -5.43% gave up 6.2%, BBVA SA (ES:BBVA) -2.30% BBVA +0.61% fell 3% and Banco Santander SA (ES:SAN) -2.28% slipped 2.7%. Yields on 10-year Spanish government bondsES:10YR_ESP +2.87% rose 21 basis points to 7.08%, according to electronic trading platform Tradeweb. A basis point is 1/100 percentage point. Elsewhere, banks were also weighing on indexes. In the U.K., Barclays PLC UK:BARC -2.14% BCS +4.87% dropped 2.3%, Lloyds Banking Group PLC (UK:LLOY) -2.78% LYG +4.35% fell 3.1% and Royal Bank of Scotland Group PLC (UK:RBS) -1.90% RBS +9.66% slipped 2.8%, Market Watch reported. The FTSE 100 index (UK:UKX) -0.13% was off 0.1% to 5,475.59, erasing a gain from earlier in the session. German shares, however, showed more positive trends, with the DAX 30 index (DX:DAX) +0.79% gaining 0.7% to 6,270.10. Car makers helped support the index, as BMW AG (DE:BMW) +1.27% added 2.1%, Daimler AG (DE:DAI) +1.29% took on 1.9% and Volkswagen AG (DE:VOW) +1.58% (DE:VOW3) +1.58% rose 1.5%. In France, the CAC 40 index (FR:PX1) +0.25% , was up 0.1% to 3,090.70, struggling to stay higher as banks moved lower. Société Générale SA (FR:GLE) -2.31% slid 1.7%, Credit Agricole SA (FR:ACA) -1.55% lost 1.3% and BNP Paribas SA (FR:BNP) -1.78% fell 1.6%.
