World markets mixed after Greece vote

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NEW YORK (CNNMoney) -- World markets had a muted reaction to the critical confidence vote won by Greek Prime Minister George Papandreou late Tuesday.

China's Shanghai Composite and Hong Kong's Hang Sang were virtually unchanged following the vote. Japan's Nikkei added 1.8%. European stocks finished about 0.1% lower.

U.S. stocks also had a muted reaction to the news, as investors shifted their focus to the latest pronouncements from the Federal Reserve.

Winning the confidence vote means that Papandreou will likely be able to get the Greek parliament to pass austerity measures by the end of the June.

"[But] it does not solve Greece's underlying problem, which is that it has more debt than it can possibly repay," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

Greece's austerity measures, which include reductions in the pay of public workers and an increase in the attrition of public jobs, are the key to securing the country's final installment of funds -- about €12 billion euros, or $17 billion -- from the International Monetary Fund's €110 billion euro, or $156 billion, bailout package approved in 2010.

End of the line: What a Greek default means

It's still not certain that the European Union is ready to take the necessary steps to help Greece avert a default, which could happen as early as mid-July and send shock waves through Europe's banking sector, said High Frequency economist Carl Weinberg.

"A restructuring is still necessary to avoid a default in the future," added Shepherdson. "But the danger of a more or less immediate disaster, with potentially severe consequences in financial markets around the world -- including the U.S. -- is much reduced, for a while anyway."

With Papandreou's win of the confidence vote, however, investors are hopeful that the Greek parliament members will soon follow with their support for the austerity program.

The euro edged down about 0.3% versus the dollar on the news, as investors remain concerned about Europe's widespread debt problems.