(MENAFN- AFP) Europe's main stock markets rebounded Wednesday, reversing earlier losses as investors fished for bargain shares despite fears over a possible Greek default and euro exit.
London's benchmark FTSE 100 index of top companies rose 1.13 percent to 6,830.27 points.
Meanwhile in the eurozone the CAC 40 in Paris climbed 1.75 percent to 4,934.91 points and Frankfurt's DAX 30 jumped 2.40 percent to 11,265.39 points.
Milan shot up 2.50 percent and Madrid rose 1.46 percent.
In foreign exchange activity, the euro climbed to $1.1306 from $1.1280 late on Tuesday in New York.
"We've seen a welcome respite for European stock markets today after several days of declines, despite continued moves higher in bond yields," said Michael Hewson, chief market analyst at CMC Markets UK.
"It would appear that after several days of drifting lower we've seen some signs of tentative bargain hunting, given that stocks have been trading near multi week lows, with some well received trading updates also helping boost sentiment," he added.
With the DAX having lost almost 7 percent since the start of the month "many market participants viewed the recent sell-off in equities as overdone, especially since recent economic data releases hint at a more robust global economy as earnings and inflation fears subside," said research analyst Kash Kamal at Sucden Financial.
European bond yields continued to rise, with the benchmark 10-year German bond briefly rising above 1.0 percent for the first time since last September.
After the hitting a record low rate of return to investors of 0.05 percent in April, the yield on German 10-year bonds has risen sharply, deflation fears have subsided and investors are dumping so-called safe haven investments.
Investors were nevertheless keeping an eye on developments with Greece, with the European Commission saying it was not satisfied with Greece's new bailout reform proposals.
A meeting between Greek Prime Minister Alexis Tsipras, France's President Francois Hollande and German Chancellor Angela Merkel was on the cards at the EU-Latin America summit on Wednesday.
Cash-strapped Greece is still trying to unlock the final 7.2 billion euros ($8.1 billion) of its international bailout with a 1.6 billion euro payment to the IMF due at the end of the month.
Financial markets remain worried about the nation defaulting, thus setting up a possible exit from the eurozone.
- Greek 'nightmare scenario' remains -
"The nightmare scenario remains that a deal between Greece and its creditors is struck at the 11th hour but then voted down internally within Greece," cautioned economist Jeremy Cook at brokers World First.
"If no time is left to renegotiate further, then default, capital controls and a Greek exit from the eurozone are all the more probable."
In London on Wednesday, British-based emerging markets bank Standard Chartered saw its share price soar 5.80 percent to 1,094 pence on optimism over the group's outlook, as new chief executive Bill Winters began his first day in the job.
And supermarket chain Sainsbury rallied 4.54 percent to 260.30 pence, despite news of sliding first-quarter sales.
Sainsbury said in a trading update that same store sales excluding fuel fell 2.1 percent in the 12 weeks to June 6, compared with a year earlier.
However, the quarter-on-quarter drop was not as heavy as elsewhere in the sector, which has suffered from falling food prices and fierce competition.
Other supermarket chains also saw their shares jump, with Tesco rising 4.63 percent to 211.45 pence and Morrisons climbing 4.96 percent.
Greece's ongoing bailout reform talks also kept Asian markets jittery.
Asian equities mostly fell Wednesday, with Tokyo also suffering a late sell-off as the yen rose sharply after comments from the central bank chief that the currency would probably not weaken further.
The remarks from Haruhiko Kuroda reversed morning gains in the dollar against the Japanese currency, fuelled by two US reports that gave the Federal Reserve more ammunition to raise interest rates.
Tokyo ended 0.25 percent lower, Hong Kong lost 1.12 percent and Shanghai closed down 0.15 percent, while Sydney added 0.13 percent.
But US stocks pushed higher Wednesday as oil sector equities rose with crude prices and retailer Target boosted its dividend.
In midday trading the Dow Jones Industrial Average rose 1.41 percent to stand at 18,014.91 points.
The broad-based S&P 500 climbed 1.26 percent to 2,106.35, while the tech-rich Nasdaq Composite Index rose 1.33 percent to 5,080.69.
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