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Europe: Stocks close higher ahead of Greece deadline
[LONDON] Europe's stock markets finished on Thursday higher as optimism surged ahead of a deadline for Greece to submit new bailout plans, while a rebound in Chinese shares boosted sentiment.
Frankfurt's DAX 30 finished 2.32 per cent up at 10,996.41 points, while the CAC 40 in Paris ended 2.55 per cent higher at 4,757.22 points compared with Wednesday's close.
Outside the eurozone, London's benchmark FTSE 100 index of leading companies ended the day 1.40 per cent ahead at 6,581.63 points, after the Bank of England decided to keep its main lending rate at 0.50 per cent, where it has stood for more than six years.
But it was largely reports of possible movement towards a maddeningly elusive Greek rescue plan that influenced most trading Thursday, with news suggesting Athens was ready to accept increased belt-tightening as creditors considered debt relief.
"The markets have really taken any positivity over a Greek deal to heart this afternoon, with the DAX and CAC surging to three-digit gain," said Connor Campbell, analyst at Spreadex trading group.
Investor outlook remained positive even after the International Monetary Fund lowered its 2015 global economic growth forecast on Thursday, citing a likely "temporary setback" from the United States in the first months of the year.
"Despite a bearish release from the IMF, which cut its world growth outlook from 3.5 to 3.3 per cent for 2015, the dribble of pro-deal comments from the eurozone have lent the markets an extra air of optimism this Thursday," Mr Campbell noted.
Greece is hurtling towards a midnight deadline to propose reforms needed to strike a new bailout deal with creditors, and obtain billions of euros of aid desperately needed to keep its struggling economy from collapsing and crashing out of the euro.
In foreign exchange dealings, the euro fell to US$1.1039 from US$1.1077 late in New York on Wednesday.
Asian stock markets closed higher on Thursday, reversing heavy morning losses and tracking a surge in Shanghai after China announced new measures to staunch a mainland rout that has fuelled fears about the wider economy.
US stocks were mixed during midday trades after earlier strong rises on the tails of the sharp rebounds in European and Asian markets.
The Dow Jones Industrial Average showed a 0.92 per cent gain at 17,675.76 points, while the tech-rich Nasdaq Composite Index rose 1.08 per cent to 4,962.81.
The broad-based S&P 500 reversed early gains to dip 1.67 percent to 2,046.68 points.
US stocks had slumped on Wednesday on worries about China and Greece in a session that was overshadowed by a lengthy outage at the New York Stock Exchange owing to technical problems.
Federal Reserve policymakers meanwhile favoured caution at a meeting last month about raising interest rates as they weighed weak spots in the economy and foreign risks, the minutes showed.
"The general theme was one of acknowledging the improvement in the US economy while saying more data is needed to confirm that policy objectives will be met," said Jasper Lawler, analyst at CMC Markets UK.
"The biggest turn up for the books was a direct mention of Greece from the Fed. The committee acknowledged the possibility for disruption in European financial markets and said there could be spillover effects on the US.
"The implication being, that should there be a Greek exit from the eurozone, a rate hike in the US would more than likely be delayed. So while European equities would probably suffer some serious damage following a Grexit, US stocks may fare a bit better on hopes of lower rates for longer," Mr Lawler added.