Business

Greek confidence vote leaves markets nervous

European trading remained jittery in the wake of the Greek government's crucial confidence vote, even though Asian shares had closed higher.

Leading shares in London and Paris remained down, while Frankfurt was flat.

Earlier, Asian shares closed higher on hopes Greece would avoid a default, after Prime Minister George Papandreou's new cabinet was approved by parliament.

Japan's main Nikkei index rose 1.9%.

In Wednesday trading, the euro, Europe's shared currency, was at $1.43.99, 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'

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.

"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.

"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.