Greek bailout hopes shore up markets

Associated Press photo by YVES LOGGHEGreek Finance Minister Evangelos Venizelos, left, talks with European Central Bank President Mario Draghi,second from right, during a round table meeting of eurozone finance ministers in Brussels on Monday. World markets, excluding the U.S. where exchanges were closed, were counting Monday on a resolution to a financial bailout for Greece.

LONDON — World markets rose Monday on hopes that Greece will finally secure a massive but long-delayed international bailout, allowing the debt-crippled country to avoid defaulting on its debts next month.

A surprise easing in monetary policy in China over the weekend also added to the buoyant mood in markets — many stock indexes are trading at multi-month highs, while the euro has recovered its poise.

The main focus of attention — on a day when Wall Street was closed for the President’s Day holiday — was Brussels, where finance ministers from the 17 eurozone countries gathered to discuss the elusive Greek bailout deal.

“Although we can all be allowed a degree of skepticism regarding an imminent solution to the Greek bailout, investors still seem happy to look for excuses to buy, and stock markets still seem to have plenty of momentum, even considering how far they have come in recent months,” said David Jones, chief market strategist at IG Index.

In Europe, the FTSE 100 index of leading British shares closed 0.7 percent higher at 5,945.25 while Germany’s DAX rose 1.5 percent to 6,948.25. The CAC-40 in France rose 1.0 percent to 3,472.54.

The euro was 0.4 percent higher at $1.3257.

Sentiment was also boosted by the surprise decision over the weekend by China’s central bank to lower the ratio of funds that banks must hold as reserves to 20.5 percent from 21 percent, effective Friday. That will free up tens of billions of dollars for loans at a time when the growth rate is expected to drop from last quarter’s 8.9 percent to closer to 8.0 percent. The cut is the second in two months.

“The loosening of monetary policy reflects official concern over the prospects for economic growth, where a variety of indicators such as exports, industrial production and retail sales are all reflecting a slower pace of growth,” said Neil MacKinnon, global macro strategist at VTB Capital.

Earlier in Asia, Japan’s Nikkei 225 index added 1.1 percent to close at 9,485.09, its highest closing level of the year. South Korea’s Kospi rose slightly to 2,024.90. Mainland China’s benchmark Shanghai Composite Index climbed 0.3 percent to 2,363.60 after gaining more than 1 percent earlier in the day, while the Shenzhen Composite Index gained 0.3 percent to 923.32.

Hong Kong’s Hang Seng dipped 0.3 percent to 21,424.79.