European stock markets rose Tuesday after the 16 countries that share the euro agreed to help Greece with loans _ if needed _ and a German investor sentiment survey fell less than expected.
LONDON -- European stock markets rose Tuesday after the 16 countries that share the euro agreed to help Greece with loans _ if needed _ and a German investor sentiment survey fell less than expected.
The FTSE 100 index of leading British shares was up 13.64 points, or 0.2 percent, at 5,607.49 while Germany's DAX rose 43.21 points, or 0.7 percent, at 5,946.77. The CAC-40 in France was 29.26 points, or 0.8 percent, higher at 5,920.15.
The euro rose 0.4 percent over the day to $1.3721.
Sentiment in Europe has been moderately buoyed by the news late Monday that the eurozone finance ministers pledged to provide Greece with loans, if needed. Though the exact details of how a package would work remain vague, the hope within the eurozone is that the mere announcement of a stronger support package will ease market concerns about Greece's debt problems, and help to bring the cost of borrowing down for Greece.
"The optimal result of this strategy would be that its very existence will be sufficient to bid market rates lower, allowing Greece to carry on funding its debt in the open market," said Jane Foley, research director at Forex.com.
Greece has to roll over around euro55 billion of debt this year, including euro20 billion in the next couple of months, and wants to be able to tap the bond markets for cash at cheaper rates.
"Insofar as this system pushes Greece further away from crisis, this is a good step forward for monetary union and should lend short-term support for the euro," said Foley.
Analysts though doubt that the eurozone is out of the woods yet, especially as the crisis surrounding Greece's debt position has exposed a deep vulnerability at the heart of the single currency project _ the lack of proper budgetary controls.
In addition, there's skepticism in the markets about whether the Greek government can push through its plan to reduce the budget deficit by four percentage points this year alone to 8.7 percent of the country's national income, given likely social unrest as wages and state benefits effectively decline.
"This is where politics enters the field of economics and why there is likely to be a sharp rise in social and political discontent," said Neil Mackinnon, global macro strategist at VTB Capital.
For now though, there's some cautious relief that the eurozone has finally agreed to something beside verbal support for Greece's package.
Further buoying sentiment, in Europe at least, was a better than expected survey from the ZEW Institute in Germany. Though its headline economic expectations index fell for the sixth month running in March to 44.5, the decline was not as big anticipated _ the consensus in the markets was that the index would drop to 43 from February's 45.1.
The main event later will be the outcome of the U.S. Federal Reserve's latest policy meeting. Wall Street is not expected to move too much before the policy statement due at 1815 GMT (2 p.m. EST). The Dow opened up 16.48 points, or 0.2 percent at 10,658.63, while the broader Standard & Poor's 500 futures rose 3.1 points, or 0.3 percent, to 1,153.61.
Though no one thinks there will be any change in the benchmark Fed funds rate from the current historic low of 0-0.25 percent, investors will be on the lookout for any changes in the statement accompanying the rate decision.
"There is no chance of a rate change but there is a desire to make tiny changes to signal a tortoise-like move towards normality," said Kit Juckes, chief economist at ECU Group. "Any change is probably dollar-positive."
Japan's central bank is also in focus _ while it is expected to maintain its benchmark interest rate at 0.1 percent Wednesday, there's growing speculation it will ease policy in other ways, possibly by expanding loan programs and other steps to keep money cheap and available as the world's second-largest economy heals.
Earlier, Tokyo's Nikkei 225 stock average fell 30.27 points, or 0.3 percent, to 10,721.71, while Hong Kong's Hang Seng lost 56.17 points, or 0.3 percent, to 21,022.93. South Korea's Kospi was off 1.49, or 0.1 percent, to 1,648.01.
Elsewhere, Shanghai's market rose 0.5 percent and Australia's was up 0.3 percent.
Oil prices hovered around $80 a barrel, with benchmark crude for April delivery up 51 cents at $80.31 a barrel.
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AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.