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 Stock markets across Europe and Asia rose more than 1 percent, the
euro gained and low-rated euro zone bond yields retreated, after a
volatile week that saw Greece's banks remain shut following a
referendum vote that rejected previous bailout terms and raised
chances of a "Grexit" from the euro.
The new agreement is by no means a done deal. Greece's parliament
still needs to throw its weight behind the proposals and trust with
creditors needs to be rebuilt. But investors dialled down cautious
trades and market volatility in Europe fell to its lowest in over
two weeks.
"The 'no' in the referendum appears to be turning into a 'yes' from
Tsipras," Commerzbank analyst Markus Koch said.
The euro climbed 1.3 percent against the yen to 135.60 and added 0.7
percent against the dollar to trade at $1.1115.
 Chinese stocks were also buoyed by a raft of support measures from
Beijing that appeared to calm investors. Panic selling had slashed a
third of the value off mainland markets since its peak in June.
China's worries have spread to other markets, with iron ore the
hardest-hit industrial commodity and oil prices also hit.
Confidence helped some commodities rebound. U.S. crude was up 58
cents to $53.36 per barrel and Brent also up at around $59.12.
Volatile trade kept London copper lower, however, and iron ore was
headed for a steep weekly fall.
"Contrary to the hype and hysteria that has accompanied the fall in
China share prices, there is unlikely to be any impact on bank
solvency or underlying credit conditions," said Sean Darby, a
strategist at Jefferies.
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Japan's Nikkei stock index <.N225> erased gains and ended a volatile
session down 0.4 percent, closing below the psychologically
significant 20,000 level for a weekly loss of 3.7 percent. That was
the biggest weekly drop since October.
The silver lining is that valuations have become more attractive,
which was drawing retail investors and pension funds who usually buy
stocks when they are falling, according to market participants.
"Most people think the worst is over," said Isao Kubo, equity
strategist at Nissay Asset Management.
(Reporting by Lionel Laurent; Additional reporting by Marius
Zaharia, Anirban Nag and Alistair Smout; Editing by Larry King)
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