European shares bounced back early on Friday from three-month closing lows, with investor risk appetite rising on expectations Greece could avoid a default after international agencies gave their go-ahead for a five-year austerity plan. Asian shares and US futures were positive.

European shares pared gains as traders pointed to a suspension of trade of Italian banking stocks. By mid-morning the FTSEurofirst 300 index of top European shares was up 0.6 percent at 1,082.12 points after trading as high as 1,088.79 earlier. Trading in shares of UniCredit and Intesa Sanpaolo was halted. After trade resumption UniCredit fell 3 percent and Intesa Sanpaolo lost 2.3 percent.

Miners featured among the top gainers, tracking metals prices that rose on Greek news and as industrialised countries had tapped oil reserves to stimulate global growth. The sector index rose, while Antofagasta jumped.

European Union leaders promised more money to help Greece stave off looming bankruptcy, provided its parliament enacts the austerity plan. Greek Prime Minister George Papandreou promised to push through radical economic reform after his new finance minister clinched agreement with EU and IMF inspectors on tax rises and spending cuts to plug a 3.8 billion euro funding gap.

The cost of insuring Greek debt against default rose as investors saw more hurdles for Greece. Greece may have reached an agreement, but it is still got a vote in parliament next week,” said the head of dealing at a fund company that manages $80 billion.

Japanese stocks rose, sending the Topix index to its largest weekly gain in almost a year, after European leaders said Greece is getting closer to meeting conditions for a rescue, easing concern the country will suffer a default that destabilizes the region’s banking system. The Nikkei 225 Stock Average and the Topix rose 0.9 percent respectively.

This article was compiled by Valletta Fund Management Limited, a member of the BOV Group. Valletta Fund Management,

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