World stock markets flat; euro steadies after Syriza win in Greece

By Caroline Valetkevitch

NEW YORK (Reuters) - The euro steadied after losing ground on Monday, suggesting confidence in the ECB's new money-printing program despite Greek election winner Syriza's pledge to take on international lenders.

The victory by the Syriza party spurred concern over fresh instability in the euro zone, even as the possibility of Greece leaving the bloc was considered remote.

Global stock indexes were little changed. U.S. stocks were lower in early trading, while MSCI's global share index was up slightly. The main Athens index fell and Greek bond yields rose.

"The ongoing display of angst is that Greece removes itself from the euro zone. It's the unknown about things breaking up," said Frank Davis, director of sales and trading at LEK Securities in New York. "We consider that a remote possibility, but it makes sense for us to take a pause and reassess our fundamentals."

The Dow Jones industrial average was down 14.08 points, or 0.08 percent, to 17,658.52, the S&P 500 lost 0.01 points, or -0 percent, to 2,051.81 and the Nasdaq Composite added 0.21 points, or 0 percent, to 4,758.09.

The Greek vote failed to derail Europe's European Central Bank-driven share rally. An index of European shares was up 0.3 percent. The ECB announced a massive bond-buying plan last Thursday,

The euro was near flat at $1.1264 after falling to a new 11-year low in Asian trade.

Syriza's demands for a debt restructuring have raised the prospect of a stand-off between Athens and other European leaders that might lead to a "Grexit" although financial markets were treating that as a marginal risk on Monday.

The potentially negative consequences of such a move for Greece and Europe were likely to force policymakers to find an agreement, analysts said.

Syriza leader Alexis Tsipras promised Greeks on Sunday that the five years of austerity imposed under bailout programs worth 240 billion euros from the European Union and the International Monetary Fund were over. [ID:nL6N0V401R] He later struck a deal with the right-wing, anti-bailout Independent Greeks party to form a government. [ID:nL6N0V50DO]

Greek markets were lower after the vote. Ten-year yields rose 41 basis points to 9.18 percent, while the main stock index fell 3.2 percent.

Unlike at the height of the euro zone's debt crisis in 2011-12, European banks have limited exposure to Greece, while policymakers have put in place safety nets to deal with renewed contagion.

In the U.S. Treasuries market, the benchmark 10-year Treasury note was off 6/32 and yielding 1.8369 percent.

Investors also were focused on this week's Federal Reserve meeting and any signals that come out about a potential rate hike later in the year.

U.S. crude was flat while Brent was down slightly. Saudi Arabia's new King Salman moved to assuage fears of any policy change in the world's largest oil exporter.

March Brent crude was down 27 cents at $48.52 a barrel, while U.S. crude was up 10 cents at $45.69.[O/R]

Copper dropped as low as $5,345 per tonne, its lowest level in 5-1/2 years.

(Additional reporting by Ryan Vlastelica in New York; Marius Zaharia, Atul Prakash, Blaise Robinson and Patrick Graham in London; Editing by Catherine Evans, Ruth Pitchford and Dan Grebler)