Mitsotakis victory: Five questions for markets

Greek stocks and government bonds rallied sharply on Monday, cheering the ruling New Democracy party's election showing.

Prime Minister Kyriakos Mitsotakis' party fell just short of a majority in Sunday's vote, making a second election likely.

But with its lead larger than polls predicted, analysts expect New Democracy to win an outright majority in a potential second round. Mitsotakis said he would not form a coalition and hoped for a new election on June 25.

Having previously considered coalition scenarios, markets cheered the lead for Mitsotakis and a disastrous result for the leftist Syriza party under which Greece nearly crashed out of the euro in 2015.

"New Democracy is seen as a reformist party among investors and the economic outlook is more optimistic because there is strong political stability," said Wolfango Piccoli, co-president at financial...