* Athens stocks fall 1.8 pct after anti-austerity Syriza win
* FTSEurofirst 300 up 0.2 pct, ECB rally rolls on
* Investors take profit on Greek uncertainty
* QE optimism contains damage in markets (Updates with detail, quotes, latest prices)
By Blaise Robinson and Alistair Smout
PARIS/LONDON, Jan 26 (Reuters) - Greek stocks fell in volatile trade on Monday after anti-austerity party Syriza swept to victory in Sunday's election, while European equities kept rising on the European Central Bank's bond-buying plan.
Athens's ATG index was down 1.8 percent at 1043 GMT, led lower by banking stocks such as Piraeus Bank, down 10.4 percent, and Alpha Bank, down 6 percent, with investors taking a cautious stance as Greece's new leftwing leader Alexis Tsipras was set to form a new government.
Greek shares briefly turned positive in volatile trade before turning lower again, after Tsipras struck a deal with a right-wing party to form a government to confront international lenders and reverse years of painful austerity following a crushing election victory by his Syriza party.
"Today the news is that there is a government, which gives some reassurance. We said volatility will be the theme of the day and definitely it will be up and down," said Vangelis Karanikas, head of research at Euroxx Securities in Athens, who added that a second round of elections would have been the worst case scenario.
The fall was not enough to erase the past week's gains in anticipation of the ECB's new stimulus measures designed to revive the euro zone's flagging economy. The ATG index is still up by almost 5 percent since a week ago.
The pan-European FTSEurofirst 300 index was up 0.2 percent at 1,482.82 points at 1048 GMT, close to seven-year highs, with benchmark indexes in Frankfurt and Paris in positive territory.
Shares in Southern European markets featured among the biggest underperformers, with Italy's MIB index, Portugal's PSI 20 and Spain's IBEX all flat to 0.3 percent higher.
"Even if 'Grexit' is not in the cards today, we can't exclude the risk of a rise in tensions in the coming months on the austerity front as well as in potential negotiations over Greek debt," said John Plassard, senior equity sales trader at Mirabaud Securities in Geneva.
"The real concern is that negotiations with Greece to soften austerity measures could prompt other euro zone countries to ask for the same."
Among the top gainers, shares in Belgian supermarket group Delhaize rose 4.6 percent after the group posted better-than-expected sales for the fourth quarter.
International Consolidated Airlines Group (IAG) rose 3.6 percent after Aer Lingus said it was considering an improved 1.36 billion euro ($1.5 billion) takeover proposal from the owner of British Airways.
It is the third attempt by IAG to buy its Irish rival, which traders said makes strategic sense for the airline. Aer Lingus rose 1.5 percent.
Today's European research round-up (Additional reporting by Francesco Canepa in London; Editing by Hugh Lawson)