LONDON – Markets were in a cautious mood on Monday as talks dragged on between Greek political leaders over a fresh austerity package that is required if the debt-ridden country is to get a crucial bailout package.

Even though another round of deadlines have passed, the prevailing mood in the markets is that Greece will get a debt-reduction deal with its private creditors as well as a second bailout from its partners in the eurozone and the International Monetary Fund.

However, as one deadline after another is missed, some traders are preparing for the worst — a disorderly debt default that could send shockwaves round the global economy.

The leaders of the parties backing Greece’s coalition government, which is headed by Prime Minister Lucas Papademos, were to hold a second day of emergency talks over austerity measures that rescue creditors are demanding in return for more money. The talks, however, were postponed until Tuesday despite pressure from the European Union for a speedy agreement so that the country can avoid a default on its debt.

Greek politicians are balking at the level of austerity demanded by the country’s bailout lenders. The three party leaders have publicly opposed steep cuts in public spending and private sector pay demanded by the eurozone and International Monetary Fund, but their backing is needed for the government to reach a deal for a euro130 billion ($170 billion) bailout.

“While we still believe that a voluntary Greek debt restructuring deal and further EU aid will be forthcoming, the risks of a more disruptive scenario have probably increased,” said Vassili Serebriakov, an analyst at Wells Fargo Bank.

In Europe, the FTSE 100 index of leading British shares closed down 0.2 percent at 5,892.20 while Germany’s DAX was flat at 6,764.83. The CAC-40 in France ended 0.6 percent lower at 3,405.27.

On Wall Street, the Dow Jones industrial average was down 0.3 percent at 12,822.38 while the broader Standard & Poor’s 500 index was 0.2 percent lower at 1,341.82.

So far this year, the mood in markets has been particularly upbeat, especially compared with the febrile trading that marked 2011. Stocks have rallied — many indexes are at their highest levels in months — while the cost of borrowing for key euro countries, such as Italy and Spain, has eased to levels that are considered sustainable in the long-run.

One of the reasons behind the change in tone has been optimism that Greek Prime Minister Lucas Papademos, who is due to meet with negotiators from the eurozone and the International Monetary Fund later Monday, will secure the second bailout.

The euro130 billion ($171 billion) bailout deal is vital for Greece to avoid bankruptcy next month as it cannot cover a euro14.5 billion ($19.1 billion) bond repayment due March 20 without the rescue funds.

The bailout’s implementation also depends on Greece’s progress in separate talks with banks and other private bondholders to forgive euro100 billion ($131.6 billion) in Greek debt, in exchange for a cash payment and new bonds with more lenient repayment terms.

Another key prop to the improvement in market sentiment this year has been a run of solid economic data out of the U.S., which has prompted some analysts to revise up their expectations for growth in the world’s largest economy. The improving trend was evident last Friday, when government figures showed the U.S. economy generated a bigger than expected 243,000 jobs in January, pushing the unemployment rate down to 8.3 percent.

The euro was under pressure as investors awaited developments in Athens — the currency was trading 0.1 percent lower at $1.3109.

Oil prices tracked the broader market trends Monday, with benchmark oil for March delivery down 58 cents at $97.26 a barrel in electronic trading on the New York Mercantile Exchange.

Greece will likely remain the focal point over the week, though a raft of corporate earnings, particularly in Europe, and central bank meetings could garner some interest. The European Central Bank’s monthly policy meeting on Thursday could be crucial in determining market expectations of whether there will be further interest rate reductions. Meanwhile, many traders think the Bank of England will clear the way to inject more money into the U.K. economy in the hope of boosting lending.

Earlier Asian shares mostly traded higher as investors there had their first chance to respond to join in the advance generated by Friday’s upbeat jobs data.

Japan’s Nikkei 225 index rose 1.1 percent to close at 8,929.20, its highest closing in more than three months but Hong Kong’s Hang Seng lost 0.2 percent to 20,709.94. Benchmarks in Singapore and mainland China also rose.

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Pamela Sampson in Bangkok contributed to this report.

LONDON – Markets were in a jittery mood on Monday as talks dragged on between Greek political leaders over a fresh austerity package that is required if the debt-ridden country is to get a crucial bailout package.

The leaders of the parties backing Greece’s coalition government are set to hold a second day of emergency talks over austerity measures that rescue creditors are demanding in return for more money. Prime Minister Lucas Papademos will meet with negotiators from the eurozone and the International Monetary Fund in the afternoon and then with the leaders of the three parties backing his coalition.

The parties all publicly oppose steep cuts in private sector pay demanded by the eurozone and IMF, but their backing is needed for the government to reach a deal for the bailout, which must be approved by the Greek Parliament. The new euro130 billion ($171 billion) bailout deal is vital for Greece to avoid bankruptcy next month as it cannot cover a euro14.5 billion ($19.1 billion) bond repayment due March 20 without the rescue funds.

The bailout’s implementation also depends on Greece’s progress in separate talks with banks and other private bondholders to forgive euro100 billion ($131.6 billion) in Greek debt, in exchange for a cash payment and new bonds with more lenient repayment terms.

“Time is running out,” said Lee Hardman, an analyst at The Bank of Tokyo-Mitsubishi UFJ.

Fears that a deal won’t emerge have reinforced concerns of a disorderly Greek debt default that could send shockwaves round the global economy. That’s kept investors on edge on Monday, even though market sentiment has been fairly buoyant of late following a run of strong U.S. economic data, notably last Friday’s forecast-busting jobs figures for January.

In Europe, the FTSE 100 index of leading British shares was down 0.5 percent at 5,871 while Germany’s DAX fell 0.7 percent to 6,720. The CAC-40 in France was 1.3 percent lower at 3,384.

Wall Street was also poised for a lower opening following its rally on Friday, when government figures showed the U.S. economy generated a bigger than expected 243,000 jobs in January, pushing the unemployment rate down to 8.3 percent. Dow futures were down 0.4 percent at 12,744 while the broader Standard & Poor’s 500 futures fell 0.6 percent at 1,332.

The euro was also under pressure as investors awaited developments in Athens — the currency was trading 0.8 percent lower at $1.3041.

Oil prices tracked the broader market trends, with benchmark oil for March delivery down $1.17 at $96.67 a barrel in electronic trading on the New York Mercantile Exchange.

Greece will likely remain the focal point over the week, though a raft of corporate earnings, particularly in Europe, and a host of central bank meetings could garner some interest. The European Central Bank’s monthly policy meeting on Thursday could be crucial in determining market expectations of whether there will be further interest rate reductions. Meanwhile, many traders think the Bank of England will clear the way to inject more money into the U.K. economy in the hope of boosting lending.

Earlier Asian shares mostly traded higher as investors there had their first chance to respond to join in the advance generated by Friday’s upbeat jobs data.

Japan’s Nikkei 225 index rose 1.1 percent to close at 8,929.20, its highest closing in more than three months but Hong Kong’s Hang Seng lost 0.2 percent to 20,709.94. Benchmarks in Singapore and mainland China also rose.

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Pamela Sampson in Bangkok contributed to this report.

LONDON (Reuters) – Caution ahead of U.S. jobs numbers kept a lid on gains for stock markets on Friday after an optimistic start to the year that has added more than 7 percent to global company values.

Sentiment was underpinned by data that hinted the euro zone may yet avoid recession, boosting European shares, and that China has room to ease monetary policy.

The U.S. nonfarm payrolls report will be a key catalyst as strong data would fuel growing hopes the global economy is on a firm recovery path, while disappointing numbers could add to pressure on the U.S. Federal Reserve to stimulate the economy, supporting appetite for riskier assets.

"A weak read will probably be interpreted as an indication that QE3 (a third round of quantitative easing) is needed to help the recovery," Cameron Peacock, market analyst at IG Markets, said.

Payrolls are forecast to rise by 150,000 after a 200,000 increase in December, with the unemployment rate seen static at 8.5 percent.

Tensions ahead of the data kept the dollar teetering near three-month lows versus the yen on Friday, trading at 76.19 yen and keeping alive the threat of official intervention from Tokyo to weaken the Japanese currency.

"The pressure has really been on the dollar after the FOMC meeting," said John Hardy, currency strategist at Saxo Bank.

"I think the will of the Japanese will be tested in coming days, but we're up against a hard wall with all the determination and the artillery the Japanese have."

Signs of life in a moribund euro zone came from a business survey showing the private sector economy snapped a four-month decline in January and expanded, albeit very weakly and roughly in line with earlier flash estimates.

Markit's Eurozone Composite Purchasing Managers Index (PMI) rose in January to 50.4 from 48.3 in December, above the 50 mark that denotes growth for the first time since August.

The FTSEurofirst 300 index (.FTEU3) of top European shares turned positive after the data, rising 0.2 percent.

The MSCI world equity index, which despite the euro zone debt crisis is up nearly 7.4 percent this year, was unchanged at 321.86.

But events in Greece, which is striving to seal a broader restructuring deal with its creditors by early next week, were likely to keep prices vulnerable intra-day.

The remaining risks that that process could still end up in a messy default that would have repercussions for banks and governments across Europe, supported demand for safe-haven government debt, with the German Bund future up 41 ticks higher at 139.49.

"The focus is squarely on the U.S. employment report which is crucial for near-term sentiment not just for the U.S. but in other markets as well," " Nick Stamenkovic, bond strategist, RIA Capital Markets, said

"On top of that, investors (are) still awaiting news from the Greek PSI negotiations which seem to be dragging on."

GREEK DEADLINE LOOMS

Euro zone finance ministers aim to approve a key second financing package for Greece on Monday, including agreement on the size of voluntary losses private bondholders are willing to accept and new reforms Athens must undertake.

Finance Minister Evangelos Venizelos said on Thursday the European Central Bank needed to share the restructuring burden.

It could send Athens profits from Greek bonds it holds via a roundabout route that would provide aid while respecting a ban on the ECB financing governments direct, sources said.

Investors were also on watch for possible monetary easing in China after its Purchasing Managers Index for non-manufacturing sectors dipped to 52.9 in January from 56.0 in December and input price inflation eased.

"With inflation on track to ease further, …policymakers still have ample room for more …easing measures to ensure a soft-landing," Qu Hongbin, chief economist for China and co-head of Asian economic research at HSBC, said.

The euro inched up to $1.3166, struggling to make much headway after the Chinese data.

Shares in commodities trader Glencore (GLEN.L) shed 1 percent and Xstrata (XTA.L) was down 0.7 percent.

They held on to the bulk of steep gains posted on Thursday on news the commodities trader is in talks to buy the mining group in all-share tie-up that could create a combined group worth more than 50 billion pounds ($79 billion), shaking up the industry with its biggest deal to date.

(Additional reporting by Brian Gorman, Neal Armstrong and Ana Nicolai da Costa; editing by Patrick Graham)

LONDON – Stocks spiked sharply higher on Friday after forecast-busting U.S. jobs figures reinforced hopes that the recovery in the world’s largest economy is gathering pace at a time when other regions, notably Europe, may be heading back into recession.

Figures from the Labor Department showed that employers in the U.S. added 243,000 jobs in January. As well as being the highest in nine months, the gain was around 100,000 more than anticipated.

The advance also contributed to a fifth straight fall in the U.S. unemployment rate. At 8.3 percent, it’s the lowest in three years.

The January jobs report was filled with other encouraging data and revisions. Hiring was widespread across many high-paying industries and pay increased, too.

“In terms of the broader outlook, one report does not a trend make but there is little doubt that U.S. economic data continues to surprise on the upside,” said Dan Greenhaus, chief global strategist at BTIG.

“We’ll have to wait until February’s report to see if this continues but for now, the risk rally is clearly on and from an economic perspective, it is most certainly warranted,” Greenhaus added.

In Europe, the FTSE 100 index of leading British shares was up 1.4 percent at 5,875 while Germany’s DAX rose 1.3 percent to 6,743. The CAC-40 in France was 0.8 percent higher at 3,405.

In the U.S., the Dow Jones industrial average was up 0.9 percent at 12,819 while the broader Standard & Poor’s 500 index rose 1 percent to 1,338.

The dollar also garnered some strength from the jobs figures as traders scaled back their expectations that the Federal Reserve would be pumping more money into the economy, evidenced also by a fall in Treasuries. The euro was trading 0.3 percent lower at $1.3097 while the dollar was 0.6 percent higher at 76.61 yen.

Andrew Wilkinson, chief economic strategist at Miller Tabak & Co., said the Fed would need more evidence before it is comfortable about the durability of the U.S. recovery, especially with the housing market still in a fragile state.

“It will take a series of repeat reports like today’s to deliver meaningful improvements to the unemployment rate before the Fed will feel confident that any improvement in employment prospects will replace the need for it to massage yields lower,” Wilkinson said.

Market sentiment has been fairly upbeat so far in 2012, partly on the back of a run of fairly strong U.S. economic data, which has convinced investors that the U.S. economy is over its soft patch from last summer.

The state of the U.S. economy contrasts with that of Europe, which appears headed for recession.

Official figures showed retail sales in the 17-nation eurozone dropped 0.4 percent during December, in contrast to expectations for an increase of the same amount.The data reinforced expectations that the eurozone contracted during the fourth quarter of the year. Eurostat is due to publish its first estimate for the quarter on Feb. 15.

The focus on the U.S. has proved a welcome diversion for some traders from monitoring the daily grind of Europe’s debt crisis, where much hinges on whether Greece can secure a deal with its private creditors, as is anticipated. A deal is expected soon, though that has been the official line for a few weeks.

Earlier in Asia, the picture was mixed.

Japan’s Nikkei 225 index fell 0.5 percent to close at 8,831.93 but Hong Kong’s Hang Seng ended marginally higher at 20,756.98.

Mainland Chinese shares extended gains fueled by news of fresh support for the farming and small-business sectors, with the benchmark Shanghai Composite Index rising 0.8 percent to 2,330.41 while the Shenzhen Composite Index added 1.5 percent to 878.29.

Oil markets were relatively subdued. Benchmark oil for March delivery was up 39 cents at $96.75 per barrel in electronic trading on the New York Mercantile Exchange.

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Pamela Sampson in Bangkok contributed to this report.

LONDON – Optimism over upcoming U.S. jobs figures helped stocks and the euro to rally on Friday despite further evidence that the 17-nation eurozone is heading for recession.

Following a run of fairly strong U.S. economic data, investors are increasingly confident that the world’s largest economy is over a soft patch from last summer, helping to offset the global economic impact wrought by Europe’s ongoing debt crisis.

Figures released Friday provided further evidence that the eurozone is heading for a recession. Eurostat, the EU’s statistics office, said retail sales dropped 0.4 percent during the month, in contrast to expectations for an increase of the same amount.

The December data reinforced expectations that the eurozone contracted during the fourth quarter of the year. Eurostat is due to publish its first estimate for the quarter on Feb. 15.

The highlight of the day in the markets will be the monthly U.S. nonfarm payrolls data. Expectations are that the U.S. economy generated around 150,000 jobs during January. Though that is unspectacular for an economy recovering from its worst recession since World War II, the amount of jobs being created is up from levels seen just a few months ago.

“Volatility is likely to remain low until these figures are out, with traders opting to sit and await news rather than heavily commit themselves,” said David Jones, chief market strategist at IG Index.

In Europe, the FTSE 100 index of leading British shares was up 0.5 percent at 5,823 while Germany’s DAX rose 0.4 percent to 6,682. The CAC-40 in France was 0.5 percent higher at 3,394.

Wall Street was also poised for a solid opening, though how it actually performs will hinge on the payrolls data, which are released an hour before the bell. Dow futures and the S&P 500 futures were both up 0.2 percent.

The euro was also garnering support alongside stocks — when appetite for risk is elevated, the euro often finds favour. It was trading 0.3 percent higher at $1.3177 despite the retail sales disappointment.

The focus on the U.S. has proved a welcome diversion for some traders from monitoring the daily grind of Europe’s debt crisis, where much hinges on whether Greece can secure a deal with its private creditors, as is anticipated. A deal is expected soon, though that has been the official line for a few weeks.

Earlier in Asia, the picture was mixed.

Japan’s Nikkei 225 index fell 0.5 percent to close at 8,831.93 but Hong Kong’s Hang Seng ended marginally higher at 20,756.98.

Mainland Chinese shares extended gains fueled by news of fresh support for the farming and small-business sectors, with the benchmark Shanghai Composite Index rising 0.8 percent to 2,330.41 while the Shenzhen Composite Index added 1.5 percent to 878.29.

Oil markets were also relatively subdued. Benchmark oil for March delivery was up 40 cents to $96.76 per barrel in electronic trading on the New York Mercantile Exchange.

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Pamela Sampson in Bangkok contributed to this report.

BANGKOK – World stock markets were mostly lower Friday ahead of a U.S. jobs report that is a key gauge of how robust the world’s No. 1 economy is.

Benchmark oil was nearly unchanged at $96 per barrel while the dollar fell against the euro but rose against the yen.

Major benchmarks slipped early in Europe. Britain’s FTSE 100 shed 0.1 percent to 5,789.78 while Germany’s DAX fell 0.1 percent to 6,647.85. France’s CAC-40 lost 0.2 percent at 3,368.86. Wall Street also headed for a lower opening, with Dow Jones industrial futures losing 0.1 percent to 12,650 and S&P 500 futures down 0.2 percent to 1,320.60.

The losses followed a slump among some major Asian benchmarks earlier in the day. Japan’s Nikkei 225 index fell 0.5 percent to close at 8,831.93. South Korea’s Kospi dropped 0.6 percent to 1,972.34. Australia’s S&P/ASX 200 lost 0.4 percent at 4,251.20. Hong Kong’s Hang Seng was marginally higher at 20,756.98. Benchmarks in Indonesia, New Zealand and the Philippines fell, while Singapore and Taiwan rose.

Mainland Chinese shares extended gains fueled by news of fresh support for the farming and small-business sectors, with the benchmark Shanghai Composite Index rising 0.8 percent to 2,330.41 while the Shenzhen Composite Index added 1.5 percent to 878.29. “The gains mainly stem from recent supportive policies, which will help drive the rally in the short-term, though the room for further gains is limited,” said Zhang Jiuhui, an analyst at Great Wall Securities, based in Beijing.

Poly Real Estate, China’s second-largest listed property developer, climbed 1.1 percent, while industry leader China Vanke gained 1.4 percent. China Life Insurance, China’s biggest insurance company, gained 1.2 percent and Bank of Communications rose 1.8 percent.

Later Friday, the U.S. government releases its report on January job creation and the unemployment rate. In December, the country added 200,000 jobs, and the jobless rate was 8.5 percent.

Some analysts said they are not expecting a strong increase in jobs, based on a report Wednesday from private payroll agency ADP. The report said private-sector employment rose by 170,000 in January from the previous month — fewer jobs than expected.

“The two series continue to track fairly closely and both show what everyone has rightfully fretted about for the past 18 months: there hasn’t been any trend improvement in job growth since mid-2010,” said analysts at DBS Bank Ltd. in Singapore.

Traders were largely refraining from big moves ahead of the employment data in case it turns out to be worse than expected.

“For right now, for major indexes like Dow Jones, the Hang Seng and also Germany’s DAX, they are already at a relatively high level,” said Linus Yip, strategist at First Shanghai Securities in Hong Kong. “For major indexes which shot up to high levels, we need more information for markets to expand the uptrend.”

The results of earnings reports, meanwhile, reverberated across markets. Japan’s Hitachi Ltd. jumped 7.5 percent after the electronics maker maintained its earlier earnings projection for the business year to March 31.

But Singapore Airlines fell 3.6 percent a day after announcing that quarterly profit plunged 53 percent as passenger demand slowed while higher fuel prices sent costs up. South Korean shipbuilder Hyundai Heavy Industries plummeted 7.7 percent after posting a 91 percent plunge in fourth-quarter net profit, Yonhap News agency said.

Elsewhere, Australian miner Lynas Corp. tumbled 10.1 percent amid opposition to its rare earths plant in Malaysia’s central Pahang state that is scheduled to begin operations later this year.

Stocks were largely unchanged on Wall Street on Thursday. The Dow Jones industrial average closed down less than 0.1 percent at 12,705.41. The broader Standard & Poor’s 500 index rose 0.1 percent to 1,325.54. The Nasdaq composite rose 0.4 percent to 2,859.68.

Benchmark oil for March delivery was up 18 cents to $96.54 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell by $1.25 to end at $96.36 per barrel in New York on Thursday.

In currency trading, the euro rose to $1.3148 from $1.3141 late Thursday in New York. The dollar rose to 76.18 yen from 76.16 yen.

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AP researcher Fu Ting contributed from Shanghai.

BANGKOK – Asian stock markets were mostly lower Friday ahead of a U.S. jobs report that is a key gauge of how robust the world’s No. 1 economy is.

Benchmark oil was nearly unchanged at $96 per barrel while the dollar rose against the euro and the yen.

Japan’s Nikkei 225 index fell 0.5 percent to 8,829.69. South Korea’s Kospi dropped 1 percent to 1,964.78 and Hong Kong’s Hang Seng lost 0.1 percent to 20,719.23.

Australia’s S&P/ASX 200 lost 0.4 percent at 4,249.40. Benchmarks in India, Thailand and New Zealand fell while Taiwan, Singapore and Indonesia rose.

Later Friday, the U.S. government releases its report on January job creation and the unemployment rate. In December, the country added 200,000 jobs, and the jobless rate was 8.5 percent.

Some analysts said they are not expecting a strong increase in jobs, based on a report Wednesday from private payroll agency ADP. The report said private-sector employment rose by 170,000 in January from the previous month — fewer jobs than expected.

“The two series continue to track fairly closely and both show what everyone has rightfully fretted about for the past 18 months: there hasn’t been any trend improvement in job growth since mid-2010,” said analysts at DBS Bank Ltd. in Singapore.

Traders were largely refraining from big moves ahead of the employment data in case it turns out to be worse than expected.

“For right now, for major indexes like Dow Jones, the Hang Seng and also Germany’s DAX, they are already at a relatively high level,” said Linus Yip, strategist at First Shanghai Securities in Hong Kong. “For major indexes which shot up to high levels, we need more information for markets to expand the uptrend.”

The results of earnings reports, meanwhile, reverberated across markets. Japan’s Hitachi Ltd. jumped 7.3 percent after the electronics maker maintained its earlier earnings projection for the business year to March 31.

But Singapore Airlines fell 2.5 percent a day after announcing that quarterly profit plunged 53 percent as passenger demand slowed while higher fuel prices sent costs up. South Korean shipbuilder Hyundai Heavy Industries plummeted 7.2 percent after posting a 91 percent plunge in fourth-quarter net profit, Yonhap News agency said.

Elsewhere, Australian miner Lynas Corp. tumbled 9.4 percent amid opposition to its rare earths plant in Malaysia’s central Pahang state that is scheduled to begin operations later this year.

Stocks were largely unchanged on Wall Street on Thursday. The Dow Jones industrial average closed down less than 0.1 percent at 12,705.41. The broader Standard & Poor’s 500 index rose 0.1 percent to 1,325.54. The Nasdaq composite rose 0.4 percent to 2,859.68.

Benchmark oil for March delivery was up 4 cents to $96.39 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell by $1.25 to end at $96.36 per barrel in New York on Thursday.

In currency trading, the euro fell to $1.3131 from $1.3141 late Thursday in New York. The dollar rose to 76.18 yen from 76.16 yen.

LONDON – Markets took a breather on Thursday, following solid gains in the previous session, as investors positioned themselves for crucial U.S. jobs data that often set the tone for a week or two after their release.

A recent run of solid U.S. economic news has reinforced hopes that Friday’s nonfarm payrolls data will provide further evidence that the world’s largest economy is over its soft patch from last summer.

The consensus in the markets is that the U.S. economy generated around 170,000 jobs during January. Though that is unspectacular for an economy recovering from its worst recession since World War II, the amount of jobs being created is up from levels seen just a few months ago.

The pick-up in the U.S. economic data, in general, has also helped support market sentiment at a time when there is a huge amount of uncertainty relating to Europe’s debt crisis, despite more successful bond auctions Thursday from France and Spain.

“The fact that the U.S. is growing has been another source of relief,” said Jane Foley, an analyst at Rabobank International. “A disappointing number tomorrow could spark a retrenchment in appetite for risk.”

Weekly jobless claims figures later will be watched in the context of Friday’s report for the month of January.

Ahead of that, markets were subdued, though a raft of earnings in Europe have helped maintain trading activity, as has confirmation that mining company Xstrata PLC is in merger discussions with commodities trader Glencore International PLC. A deal would create a company with revenues of around $175 billion and the news has helped both share prices rally in London.

Despite the Xstrata and Glencore’s gains — of 10 percent and 5 percent — Britain’s FTSE 100 index of leading shares was down 0.2 percent at 5,781. Germany’s DAX was 0.1 percent higher at 6,623 and the CAC-40 in France was flat at 3,366.

The euro was also subdued after recent gains, trading 0.2 percent lower at $1.3146.

Wall Street was poised for a flat opening, too — Dow futures were up 0.1 percent at 12,662 while the broader Standard & Poor’s 500 futures were flat at 1,320.

The focus on the U.S. over the rest of the week will have proved a welcome diversion for some traders from monitoring the daily grind of Europe’s debt crisis, where much hinges on whether Greece can secure a deal with its private creditors, as is anticipated.

A deal is expected in a matter of days, according to officials, though that has been the official line for a few weeks.

“Given that it’s Groundhog Day today its particularly apt that Greece continues to be the centre of continued speculation about what’s happening with respect to the debt talks and the latest bailout,” said Michael Hewson, markets analyst at CMC Markets.

“Even so markets are now so bored with it, any comments by EU officials are now being dismissed with a perfunctory shrug and an ‘I’ll believe it when I see it’ attitude,” Hewson added.

Earlier in Asia, Tokyo’s Nikkei 225 rose 0.8 percent to 8,876.82 while Hong Kong’s Hang Seng shot up 2 percent to 20,739.45 and Seoul’s Kospi added 1.3 percent to 1,984.30.

China’s benchmark Shanghai Composite Index climbed 2 percent to 2,312.56 on Thursday amid signs manufacturing improved in January for a second straight month.

Oil prices were subdued alongside other markets — benchmark oil for March delivery fell 51 cents to $97.10 per barrel Thursday in electronic trading on the New York Mercantile Exchange.

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Alex Kennedy in Singapore contributed to this report.

LONDON – Markets clawed back lost ground Tuesday on hopes that Greece is heading toward a conclusion of debt-reduction talks with private creditors and that it may secure its second bailout package this week.

Late Monday, following the agreement by a large majority of countries in the European Union to sign a new treaty designed to stop overspending in the eurozone, Greece’s Prime Minister Lucas Papademos indicated that progress was being made.

“It is likely that the market will initially cheer an agreement should it be reached reflecting reduced concerns that Greece will default disorderly in March,” said Lee Hardman, an analyst at Bank of Tokyo-Mitsubishi UFJ.

Though Greece remains the epicenter of Europe’s debt crisis, leaders are pushing ahead with other plans to tie economies together. The new treaty, commonly known as the fiscal compact, was agreed at a summit. Only Britain and the Czech Republic opted out of the deal that is meant to make it more difficult for countries to run up massive debts, like the ones that are currently roiling the 17-nation eurozone.

The hope among participants is that the tighter rules will restore confidence in their joint currency and convince investors that all of them will get their debts under control. For now, investors appear to be giving European policymakers the benefit of the doubt especially as there are hopes a second bailout of Greece will agreed alongside a debt-reduction deal between the country and its private creditors, possibly as soon as this week.

In Europe, the FTSE 100 index of leading British shares was up 0.9 percent at 5,719 while Germany’s DAX rose 1 percent to 6,508. The CAC-40 in France was 1.2 percent higher at 3,305.

Wall Street was poised for a solid opening — Dow futures and the broader S&P 500 futures were both up 0.5 percent.

The improvement in sentiment was evident in the currency markets too where the euro was up 0.4 percent at $1.3193. The euro often garners support when investors look to take on more risk.

Despite the more optimistic backdrop Tuesday, Europe’s debt woes remain the main worry in the markets. A growing fear is that Portugal may also need to get private creditors to reduce their debts, even though Europe’s leaders say Greece’s debt-reduction deal is a one-off. Portugal’s borrowing costs have been rising consistently to record highs over recent days as the economy shows few signs of improving

“The market also has Portugal in its spotlight as regards the potential default risk, and the Portuguese 10-year yield opened just above the 18 percent level this morning,” said Neil MacKinnon, global macro strategist at VTB Capital.

Earlier in Asia, solid Japanese industrial data helped stocks rally.

Tokyo’s Nikkei 225 rose 0.1 percent to 8,802.51 after data showed December industrial activity rose 4 percent over the previous month. Hong Kong’s Hang Seng gained 1.1 percent to 20,383.3 and Seoul’s Kospi was up 0.8 percent at 1,955.79.

China’s benchmark Shanghai Composite Index was up 0.3 percent at 2,292.61 ahead of Wednesday’s release of a key manufacturing index. Investors are hoping for a loosening of credit curbs if it shows activity is slowing amid lackluster global demand.

Oil prices tracked equities higher — benchmark oil for March delivery was up 98 cents to $99.76 per barrel in electronic trading on the New York Mercantile Exchange.

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Joe McDonald in Beijing contributed to this report.

BEIJING – World markets rose Tuesday as traders watched for a possible deal to cut Greece’s debts and Japanese factory output rebounded.

Benchmark oil rose above $99 per barrel while the dollar fell against the euro and was unchanged against the yen.

Tokyo’s Nikkei 225 rose 0.1 percent to 8,802.51 after data showed December industrial activity rose 4 percent over the previous month. Hong Kong’s Hang Seng gained 1.1 percent to 20,383.3 and Seoul’s Kospi was up 0.8 percent at 1,955.79.

In Europe, France’s CAC-40 added 0.8 percent to 3,292.38, rebounding from a 1.6 percent loss Monday. Germany’s DAX gained 0.5 percent to 6,473.96, reversing a 1 percent decline a day earlier. Britain’s FTSE 100 rose 0.6 percent to 5,703.94.

Wall Street was also set to open higher, with Dow Jones industrial futures rising 0.4 percent at 12,649 and S&P 500 futures 0.4 percent higher at 1,313.80.

Traders watched Europe following reports Greece and its creditors were close to a deal to cut its debts. Also Monday, European leaders agreed on a new treaty meant to stop overspending and put an end to the region’s crippling debt woes.

“Everyone is watching the European summit and how the Greek debt crisis comes out,” said Jackson Wong at Tanrich Securities in Hong Kong. “The general atmosphere is to play a wait-and-see game.”

China’s benchmark Shanghai Composite Index was up 0.3 percent at 2,292.61 ahead of Wednesday’s release of a key manufacturing index. Investors are hoping for a loosening of credit curbs if it shows activity is slowing amid lackluster global demand.

India’s Sensex gained 1.5 percent to 17,109.30 while Australia’s S&P/ASX 200 fell 0.2 percent to 4,262.70. Benchmarks in Taiwan, Thailand, Indonesia and India rose while Singapore and New Zealand fell.

European markets tumbled Monday on concerns Greece’s financial problems might not be solved even if creditors agree to cancel part of its debt.

Under a tentative agreement, investors holding 206 billion euros ($272 billion) in Greek bonds would exchange them for bonds with half the face value. The replacement bonds would have a longer maturity and pay a lower interest rate. When the bonds mature, Greece would have to pay its bondholders only 103 billion euros.

Wall Street fell in early trading but Asian investors were encouraged after the Dow Jones industrial average recovered most of its losses to close down just 0.1 percent. The Standard & Poor’s 500 lost 0.8 percent.

Borrowing costs for the most indebted European countries shot higher. The two-year interest rate for Portugal’s government debt jumped to 21 percent after trading around 14 percent last week.

Portugal may become the next country “where default is a real possibility,” said Martin Hennecke of Tyche Group in Hong Kong.

“The euro zone crisis is far from being fixed at all. Italy and Spain are effectively bankrupt as well,” Hennecke said. “For Asia, that means there is huge uncertainty in terms of export markets.”

The treaty agreed to Monday by all European Union governments except Britain and the Czech Republic includes strict debt brakes and is aimed at making it harder for violators to escape sanctions. The 17 countries in the eurozone hope the tighter rules will restore confidence in their joint currency.

Benchmark oil for March delivery gained 98 cents to $99.76 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 78 cents to end at $98.78 per barrel on the Nymex on Monday.

In currencies, the euro rose to $1.3207 from $1.3114 late Monday in New York. The dollar held steady at 76.25 yen.