European stocks rally on Greece, Ukraine hopes

European stocks rallied and the euro rose against the dollar on Thursday, as markets held out hope for a deal over Greece's bailout after high-level talks ended without agreement.
Traders meanwhile cheered a ceasefire deal for Ukraine, which also won a significant financial rescue and loan package.
London's benchmark FTSE 100 index rose 0.36 percent to stand at 6,842.96 points around midday in the British capital.
Frankfurt's DAX 30 jumped 1.60 percent to 10,923.61 points and the CAC 40 index in Paris grew 1.0 percent to 4,726.63 compared with Wednesday's close.
Greek stocks surged 4.75 percent to 830.80 points.
The euro meanwhile climbed to $1.1343 from $1.1319 late in New York on Wednesday.
"No doubt there is some disappointment that there seems to have been very little to no progress at all where Greece is concerned, however traders are still optimistic that some kind of a compromise can be achieved before Greece will possibly be running out of money later this month," said Markus Huber, senior analyst at broker Peregrine & Black.
Greece's new prime minister Alexis Tsipras on Thursday warned that Europe was at a critical crossroads as he prepared to discuss the row over the country's huge bailout at a summit in Brussels.
It will be his first encounter with German Chancellor Angela Merkel, Europe's most powerful leader who is firmly opposed to making new concessions to Athens.
Tsipras' warning followed the breakdown of talks on the Greek debt crisis between eurozone finance ministers Wednesday night, with a make-or-break meeting now set for Monday.
Tsipras insisted his government had a plan for a new bailout that could satisfy both the austerity-fatigued Greeks and European partners tired of rescuing Greece.
"We are at a crucial turning point for Europe," Tsipras said after meeting his Belgian counterpart Charles Michel, hours before a summit of the 28 European Union leaders was set to begin.
"We have to prove that Europe can find a solution, respect the positions that the parties take, and combine respect for democracy with European rules," Tsipras said.
Tsipras will try to persuade the other 27 European Union leaders to back an austerity-lite replacement plan for Greece's 240-billion-euro ($270-billion) EU-IMF bailout, which expires at the end of February.
- Ukraine progress -
Eyes were also on Ukraine, with the International Monetary Fund and the conflict-torn country having reached a preliminary deal on a new financial rescue plan worth $17.5 billion that could be a "turning point" for Kiev, IMF chief Christine Lagarde said Thursday.
In total, Ukraine will receive $40 billion (35 billion euros) in assistance over four years coupled with bilateral loans from other sources, Lagarde said, helping to stabilise Kiev's finances after 10 months of conflict in the east.
It comes as marathon talks in Belarus ended Thursday with a ceasefire announcement in the war between Ukraine and pro-Moscow rebels, although Merkel warned that "big hurdles" remained.
Russian President Vladimir Putin emerged from the summit in the Belarussian capital Minsk, saying he, Merkel, French President Francois Hollande and Ukrainian President Petro Poroshenko had agreed on the "main" points.
"There was good news for the eurozone, as Putin agreed to a ceasefire beginning on the 15th February," said Connor Campbell, analyst at Spreadex trading group.
"This, combined with the news that the IMF had tentatively agreed $17.5 billion of an overall $40 billion plan for economic aid for Ukraine, saw the eurozone (stock) indices boosted."
In London, some shine was taken off British company share prices after Bank of England governor Mark Carney on Thursday said inflation in Britain could turn negative within months and interest rates cut, signalling fresh risks to the economy before the country's general election in May.