Greek shares led world markets higher Wednesday amid mounting hopes that German opposition to a European Union financial rescue package for the heavily indebted country is waning. European markets climbed higher following big gains Tuesday on Wall Street and an earlier advance in Asia. The FTSE 100 index of leading British shares was up 29.97 points, or 0.6 percent, at 5,141.81 while Germany's DAX rose 49.54 points, or 0.9 percent, at 5,547.80. The CAC-40 in France was 30.58 points, or 0.9 percent, higher at 3,643.34. Greek shares led the advance in Europe, with the main composite index up 4.4 percent at 1,979. Stock markets in Spain and Portugal – two countries with similar problems to Greece – were also 2 percent higher. The more optimistic tone in stock markets this week has largely arisen from hopes that Thursday's meeting of European Union leaders in Brussels will agree some sort of financial support for Greece, which has been struggling to reassure markets that it can get a grip on its massive borrowings amid a nationwide strike Wednesday. EU leaders will be joined by European Central Bank president Jean-Claude Trichet and the debate is likely to center on how to ring-fence the problems in Greece so they don't start to undermine other countries as well as the euro. “If, and it remains a reasonable ‘if' this happens tomorrow, the commitment will have to be strong enough to placate markets while retaining a pretence that this is not tantamount to a bailout,” said Daragh Maher, an analyst at Calyon Credit Agricole. “In the end, the EU either directly or through a promise of conditional support may well end up being Greece's saviour, but many will wonder if this will leave this knight in shining armour looking a little tarnished,” he added. Crucial to any deal is the position of Germany, the eurozone's biggest economy, and the signs are that there's a growing acceptance within Chancellor Angela Merkel's government that Germany will have to step up to the plate to stave off this crisis that could spread like wildfire. Germany is reportedly looking at ways to help Greece by either backing a plan for a loan package from the EU or some sort of guarantee of Greece's debt position. Hopes that Germany will back a rescue deal have also given Greek bond prices some support. On Tuesday the spread between Greek and German 10-year yields dropped by 47 basis points – a clear sign that investors think a default is less likely.
