European stocks climb on Greek debt talks progress

Europe\'s main stock markets advanced Tuesday on reports of progress in Greek debt talks, and after EU leaders agreed on a treaty aimed at ending huge deficits, dealers said. London\'s FTSE 100 index of top shares rose 0.57 percent to 5,703.66 points in late morning deals, Frankfurt\'s DAX 30 index added 0.91 percent to 6,502.90 points and in Paris the CAC 40 won 1.02 percent to 3,299.07. The European single currency increased to $1.3200 from $1.3134 late in New York on Monday. The Greek prime minister said on Tuesday that Athens aims to complete a debt writedown with private investors and an accord on a 130-billion euro ($171-billion) eurozone bailout by the end of this week. The ongoing talks have kept investors on edge for weeks. \"Discussions will continue in the coming days and the aim is to achieve a deal in parallel with the completion of consultations on Greece\'s new economic programme,\" Prime Minister Lucas Papademos told reporters after a European Union summit in Brussels. Greece plans to conclude negotiations with the European Union, the European Central Bank (ECB) and the International Monetary Fund (IMF), which gave it loans in 2010 in return for reforms, \"by the end of the week,\" Papademos said. On Monday, the EU piled pressure on Athens for a swift conclusion to the debt and bailout talks vital to the country\'s economic survival, and to the well-being of the entire 17-nation eurozone. \"Greece continues to pull global market strings, with rumours of bad news forcing the markets down and rumours of good propelling the market higher,\" said analyst Rebecca O\'Keeffe at online brokerage Interactive Investor. \"Continued delays in these talks saw Europe slump yesterday, but comments from the Greek prime minister saying progress in the debt swap talks has been made, have sent European stocks higher this morning.\" Greece is trying to wrap up a deal with private investors -- including banks, insurance companies and investment funds -- that have been asked to take a 50 percent \"haircut,\" or discount, on the debt owed to them. For Greece, agreeing on such a deal is a precondition for obtaining more bailout funds from eurozone governments and the IMF. Asian markets mostly rose in the wake of Monday\'s EU summit, but traders remained cautious owing to the situation in Greece. Upbeat Japanese data also gave support but the euro remained weak as the Greek saga rumbled on and traders looked for safe havens, while the strong yen raised the possibility the government would step into forex markets again. On Monday in Brussels, 25 of the 27 EU nations adopted a new pact -- to be formally signed in March -- that will require governments to usher in laws on balanced budgets and impose near automatic sanctions on those who violate deficit rules. Britain and the Czech Republic refused to sign. The leaders also set up a permanent rescue fund to begin operations a year early in July, although they will discuss before that whether to boost its size from an initial 500-billion-euro ($660 billion) target. \"Last night saw broad agreement amongst EU nations of the fiscal treaty so favoured by Germany; however the agreement was not universal, with the UK and the Czech Republic refusing to sign up,\" said CMC Markets analyst Michael Hewson. \"The treaty is expected to legally bind EU countries to balance their budgets over time; however it is not clear whether some local parliaments might require a referendum on the issue, with Ireland a likely candidate. \"It is also not clear how legally enforceable the pact will be and how much latitude states will have with respect to \'exceptional circumstances\' in deviating from the agreement.\" Only those countries that sign up will be able to access bailout aid from a new rescue fund whose legal basis was also ticked off at the summit. It will enter force after 12 nations ratify it. In earlier Asian deals, the Tokyo stock market rose 0.11 percent, Seoul climbed 0.79 percent, Shanghai gained 0.33 percent and Hong Kong won 1.14 percent in value. But Sydney ended 0.23 percent lower.