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 The euro also nudged up but was overshadowed in currency markets by
the Aussie dollar, which skidded after Australia unexpectedly
cut interest rates.
In Athens, shares rose more than 7 percent, and the Greek banking
index surged 15 percent. Spanish and Italian stocks also
outperformed as the pan-European FTSEurofirst 300 index gained more
than 1 percent.
The new Greek government, led by the left-wing Syriza party that won
elections just over a week ago, on Monday ditched calls for a
write-off of foreign debt and proposed ending a standoff with its
official creditors by swapping the debt for new growth-linked bonds.
Finance Minister Yanis Varoufakis said after meeting investors in
London on Monday that the government would spare privately held
bonds from losses.
"Varoufakis is striking a more conciliatory tone with international
creditors, offering to swap the debt, which is positive," said John
Plassard, senior equity sales trader at Mirabaud Securities in
Geneva.
Earlier, Asian shares sagged on growth concerns. MSCI's broadest
index of Asia-Pacific shares, excluding Japan, dipped 0.2 percent
after weak U.S. data added to concerns about the state of the global
economy. Japan's Nikkei closed down 1.3 percent.
In a brighter Europe though Greek bond yields fell sharply, with
10-year yields down nearly 120 basis points at 10.24 percent and on
track for their biggest daily fall since Greek debt was restructured
in 2012.
Yields on other lower-rated euro zone government bonds also fell but
so did those on German bonds, the bloc's benchmark. German 10-year
yields dipped below those of Japan for the first time ever.
"The latest proposals for a debt restructuring in Greece seem to
have backed away from a hard haircut," RBC's head of European rates
Peter Schaffrik said.
"The more concessionary tone ... should support spread products and
generally speaking risky assets in the euro area."
The Aussie dollar was the big mover in currency markets, tumbling to
a near six-year low against the U.S. dollar after the Reserve Bank
of Australia cut interest rates. The Aussie was last down 1.8
percent at $0.7664.
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"It's a big move and I think any bounce should be sold into," said
Graham Davidson, a spot trader with National Australia Bank in
London.
"Generally when the RBA move, they tend to cut a handful of times.
The feeling is of an economy where there is no source of growth,
almost of despair."
Oil prices rose further, adding to gains of more than 11 percent in
the previous two sessions, after BP announced a 13 percent cut in
capital expenditure for 2015.
"We've seen a lot of oil companies announce significant cuts in
capacity expenditure and reductions in rig counts. What you're
getting at the moment is a paring back of expectations as a result
of the measures being taken," said Michael Hewson, chief market
analyst at CMC Markets.
Oil prices had jumped in the past two days after data showed the
number of U.S. oil drilling rigs had fallen the most in a week in
nearly 30 years.
Brent crude futures were last up 3 percent at $56.39 a barrel.
(This story has been refiled to fix headline)
(Additional reporting by Shinichi Saoshiro in Tokyo, John Geddie,
Patrick Graham and Himanshu Ojha in London and Blaise Robinson in
Paris; Editing by Susan Fenton)
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