LONDON The re-election of President Barack Obama gave markets a boost Wednesday, though the advance was tempered by concerns over his ability to get a budget agreement from a divided Congress.
Obama easily clinched a majority in the electoral college, holding on to a raft of key swing states in Tuesday's vote -- despite only just winning the popular vote over his rival Mitt Romney.
Though America has been spared a re-run of the protracted election of 2000, its arms of government remain divided, with the Democrats holding onto their majority in the Senate and the Republicans in control of the House of Representatives. That could still lead to a logjam in policymaking, not least over the parlous state of the country's public finances.
In Europe, the FTSE 100 index of leading British shares was up 0.6 percent at 5,917 while Germany's DAX rose 0.6 percent to 7,422. The CAC-40 in France was 0.9 percent higher at 3,509.
The most pressing matter facing the U.S. government is the so-called "fiscal cliff" - a combination of higher taxes and government spending cuts that automatically take effect unless Congress agrees on a new budget by Jan. 1. Economists warn that a failure to reach a concrete decision will push the world's largest economy back into recession.
"There is a sense of calm in the markets today after Obama's decisive victory, but with the 'fiscal cliff' looming ominously on the horizon investors are banking on this problem being resolved quickly," said Mike McCudden, head of derivatives at Interactive Investor.
Stock markets have also been supported by the expectation that the Federal Reserve will continue with its super-loose monetary policy in the months ahead. Romney had vowed to challenge the Fed's stance and had indicated he would not renew Ben Bernanke's tenure as chairman.
"This would have undoubtedly pushed markets lower in the short term," said James Hughes, chief market analyst at Alpari.
The possibility of more dollars being pumped into the U.S. economy weighed on the dollar. By late-morning London time, the euro was 0.3 percent higher at $1.2850 while the dollar was flat at 80.40 yen.
Though the U.S. election results are the main focus at the moment, investors will be turning their gaze later in the day towards a crucial vote in the Greek Parliament. If lawmakers don't back a 13.5 billion euro ($17.3 billion) package of spending cuts and tax increases, the country faces the prospect of losing access to its bailout lifeline and potentially defaulting on its mountain of debt and leaving the euro.
That toxic combination could have massive negative repercussions in financial markets, regardless of whether a bipartisan budget solution is reached in the U.S. in the coming weeks.
"Strange to think that over 100 million votes cast in the U.S. may have less impact upon the markets over the next month or so than some 300 votes due to be cast in the Greek parliament this evening," said Gary Jenkins, managing director of Swordfish Research.
Earlier in Asia, Japan's Nikkei 225 index closed marginally lower at 8,972.89. Hong Kong's Hang Seng added 0.7 percent to 22,099.85. South Korea's Kospi gained 0.5 percent to 1,937.55.
Mainland Chinese shares edged lower, with Shanghai Composite Index slipping marginally to 2,105.73. The smaller Shenzhen Composite Index lost 0.2 percent to 851.64
Also on investors' radar is Thursday's opening of China's Communist Party congress, the once-in-a-decade forum to name China's top leadership. Although current Vice President Xi Jinping is almost certain to be China's next leader, markets will be looking for hints on how the new leadership plans to tackle the nation's economic slowdown.
In the oil markets, a price of benchmark New York crude was down 49 cents to $88.22 per barrel in electronic trading on the New York Mercantile Exchange.