European markets rose Tuesday as investor sentiment turned positive with hopes that Greece will shortly receive the required bailout fund needed to overcome the financial instability it is facing.
The French CAC 40 index was up 0.28 percent or 9.70 points to 3416.23. Shares of Vinci SA rose 1.64 percent and those of Vivendi SA gained 0.52 percent.
London’s FTSE 100 index rose 0.17 percent or 9.77 points to 5851.51. Shares of Rio Tinto Plc gained 1.47 percent and shares of Hammerson Plc were up 0.88 percent.
Germany’s DAX 30 index advanced 0.19 percent or 13.69 points to 7304.90. Shares of Volkswagen AG rose 1.07 percent and those of SAP AG gained 0.51 percent.
Spain's IBEX 35 was marginally up 0.06 percent or 5.10 points to 7896.10. Shares of Acerinox SA rose 0.78 percent and those of Acciona SA gained 0.53 percent.
German Chancellor Angela Merkel will meet Greek Prime Minister Antonis Samaras in Athens Tuesday. They are expected to discuss austerity measures Greece should implement to receive the bailout fund from the European Central Bank (ECB).
Eurogroup Chairman Jean-Claude Juncker Monday expressed satisfaction over the progress made by Greece on austerity measures. "We were happy to learn that substantial progress has been made over the last weeks. We called on the Troika and Greece to finalize their negotiations and agree on ways to close the fiscal gap for 2013 and 2014 as soon as possible," he said at a press conference in Luxembourg.
On the fiscal front, Greece made some progress in its budget for 2013 with measures to reduce the deficit from 6.6 percent of GDP to 4.2 percent. But there are concerns that the budget is too optimistic and the economy will shrink by as much as 5 percent next year. So it is likely that there will be a need for additional wage and pension cuts in return for signing off the fiscal package.
Meanwhile, hopes that Spain will soon ask for a bailout is continuing. Investors feel that it would be unwise on the part of the Spanish government if it takes more time to seek the bailout. Market participants expect that Spain will ask for the bailout under the enhanced conditions credit line, which will trigger the bond-purchasing operation by the ECB.