World markets optimistic over Greece deal despite new delay

The prevailing view in the markets appears to be that Greece will cobble together a deal with its creditors in return for bailout cash that will help it avoid defaulting on its debts next month when a big bond repayment is due — a scenario that could send shock waves all round the European economy.

In Europe, the FTSE 100 index of leading British shares was up 0.2 percent at 5,889 while Germany's DAX rose 0.6 percent to 6,792. The CAC-40 in France was 0.5 percent higher at 3,426.

Wall Street was poised for a steady opening too, with Dow futures and S&P 500 futures unchanged.

A Greek deal had appeared to be imminent in the early hours of Thursday following marathon talks but the leaders of the three political parties supporting the government led by Prime Minister Lucas Papademos failed to accept the entire batch of new harsh austerity measures demanded by creditors. The talks stalled after the leaders balked at creditors' demands to make 300 million euros (US$398 million) in pension cuts.

Even though a deal has yet to be signed, Finance Minister Evangelos Venizelos headed to Brussels to meet top EU officials, hoping to rescue the agreement and stave off bankruptcy.

He issued a dramatic plea to the coalition leaders to swiftly resolve their differences, warning that Greece's “survival over the coming years” depends on the bailout and a related debt-relief agreement with private creditors.

The focus in the markets remains on Greece despite a raft of mixed earnings in Europe. While Germany's Daimler AG saw its share price bounce around 5 percent following another strong performance from its Mercedes luxury car division, Swiss bank Credit Suisse AG and Dutch bank and insurance firm ING Groep NV were down around 3 percent after disappointing updates.

The attention over the rest of the day will likely remain on Greece, especially at the monthly press conference of European Central Bank President Mario Draghi after the bank's expected decision to keep its benchmark interest rate unchanged at 1 percent.

Asian markets were mixed Thursday after marathon talks over Greece's massive debt ended without firm agreement and as China's annual inflation rate hit a three-month high.

Sydney ended 0.18 percent lower, dipping 7.80 points at 4,282.9, Tokyo lost 0.15 percent, or 13.35 points, at 9,002.24, while Seoul added 0.54 percent, or 10.89 points, at 2,014.62, closing at a six-month high for a second day.

Hong Kong, which also hit a six-month high on Wednesday's Asian market rally, closed flat, inching 0.04 percent, or 8.45 points, lower to 21,010.01, while Shanghai edged up 0.09 percent, or 2.06 points, at 2,349.59.

China said annual inflation hit 4.5 percent in January, its highest level in three months, after slowing to 4.1 percent in December as government efforts to curb bank lending and surging property prices took effect.

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