Sunday's elections put Greece's conservative New Democracy party in power, with enough seats to form a ruling coalition committed to austerity measures set out in the nation's 130 billion European Union-International Monetary Fund programme.
Craigs Investment Partners broker Peter McIntyre said structural reforms in Europe remained the key issue in the near future.
"Once the relief of avoiding a very negative short-term outcome fades, focus will return to the plight of the Italian Government debt load and the fiscal deficit in Spain," he said.
Forsyth Barr broker Peter Young said European stocks were little changed as the yield on Spain's benchmark 10-year bond climbed above 7% towards record levels on Monday and optimism faded that Greece's election would relieve the euro-zone debt crisis.
"The Spanish 10-year bond yields rose as much as 41 basis points to 7.29%, raising concern that Spain will need external funding," Mr Young said.
Mounting fears of the need for a full "sovereign rescue" for the Spanish economy sent the country's interest rates to a euro-era high of 7.28% overnight, BusinessDesk reported yesterday.
Mr McIntyre said investors had better investment opportunities elsewhere, as there was still a "long and difficult" road ahead for Europe to restructure its uncompetitive economies.
Greece appears set to get its European Union funding by the end of July, when it had been forecast to incur "critical cash flow problems" which will now be avoided.
"The market response will be a reasonably brief relief rally in equities and increasing interest rates as investors switch to equities," he said.
However, because of a weakening in global economic data in recent weeks, that rally was unlikely to regain more recent losses from some of the larger exchanges, he said.
"We still believe the most likely outcome is an extended period of low growth and low interest rates, punctuated with periods of intense volatility and risk," Mr McIntyre said.
World markets have cast Spain back to the centre of the euro-zone debt storm, pushing its borrowing rate to a euro-era record and dashing hopes for a respite after Greek elections, AFP reported yesterday.
Investors fled on fears the crisis could topple the euro zone's fourth largest economy, Spain, and even No 3 economy, Italy, despite the Greek vote giving pro-bail-out parties a chance to govern.
Wall Street stocks ended mixed from Monday as traders rapidly digested the victory of pro-euro parties in Greece's election and focused on the next hurdle in Europe's marathon economic crisis.
An earlier rally in Asia and Europe on the back of Greece's election results had petered out by the time Wall Street got into gear, with the focus already shifting to Spain and its sky-high cost of borrowing.
The Dow Jones Industrial Average was down 0.20%, the S&P 500 rose a modest 0.14% while the Nasdaq rose 0.78%.
"Greek elections?
"That's yesterday's news. Today's crisis is a spike in Spanish bond yields," said Dick Green of Briefing.com.
A senior official with Greece's conservative New Democracy party said parties that broadly back the country's international bail-out would form a coalition government.
Greece will accelerate and widen a privatisation programme, while planned austerity cuts will be implemented over four years instead of two, said the source, who spoke on the condition of anonymity, Reuters reported.
Safe-haven government debt gained in light volume as investors shrugged off Greece's election results and awaited the outcome of a two-day meeting of Federal Reserve policymakers in the US which started yesterday for potential signs of new stimulus measures.
