European stocks rally on hopes of Greece deal

European stock markets surged Monday as Greece appeared on course to end a five-month stand-off with international creditors over bailout repayments.

Greece's creditors saw a ray of hope as Prime Minister Alexis Tsipras went into an emergency eurozone summit aimed at finding a deal to save Athens from default and a possible exit from the euro.

And European stocks maintained their strong gains even as European Commission head Jean-Claude Juncker warned that a deal to unlock vital cash and allow Athens to avert default was "not yet there."

In Frankfurt, the DAX 30 soared 3.14 percent to stand at 11,386.84 points in late morning deals and the CAC 40 in Paris jumped 3.04 percent to 4,961.92 points.

Madrid's IBEX 35 won 2.60 percent to 11,228.40 points and Athens' main index rocketed 7.64 percent to 739.81.

Outside the eurozone, London's benchmark FTSE 100 index won 1.27 percent to 6,795.98 compared with Friday's close.

"Despite a lack of detail and multiple previous failures, European markets are rallying on expectations that a Greek resolution may finally be reached," said Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor.

After rising early on, the euro fell to $1.1338 from $1.1349 late in New York on Friday.

The European Central Bank (ECB) again increased emergency liquidity funds for Greece's banks Monday, according to a Greek bank source who said the ECB may renew the hike "at any time" if necessary.

The new increase of the ECB's Emergency Liquidity Assistance was the third since Wednesday, and came as Greek savers continued withdrawing their money in large volumes from the country's banks.

"Behind the scenes, the European Central Bank remains active in keeping Greek banks on life support," said Alistair Cotton, senior dealer at Currencies Direct.

At the same time, France's finance minister on Monday hailed the "quality work" in Athens' latest proposals to end Greece's debt crisis.

"I see the work that has been done. It is quality work," Michel Sapin told French radio. "A deal requires both sides to evolve. This work is underway and is being undertaken in good conditions."

Earlier, Juncker's office said the proposals, which the Greek premier detailed in a phone call with German, French and EU leaders, offered "a good basis for progress."

In the absence of a deal, Greece will likely default on an IMF debt payment of around 1.5 billion euros ($1.7 billion) due on June 30, leading to the possibility of it crashing out of the eurozone.