BUSINESS

European markets trim losses amid hopes of last-minute Greek deal

The Associated Press Published Tuesday, June 30, 2015 12:53AM EDT Last Updated Tuesday, June 30, 2015 9:03AM EDT

People walks past the shutters of a closed bank in central Athens on Tuesday, June 30, 2015. Greek Finance Minister Yanis Varoufakis confirmed that the country will not make its payment due later to the International Monetary Fund. Capital controls began Monday and will last at least a week, an attempt to keep the banks from collapsing in the face of a nationwide bank run.(AP Photo/Petros Giannakouris)

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LONDON -- Stock markets across Europe trimmed earlier losses Tuesday amid speculation that the Greek government is considering a last-minute effort to break the deadlock between the country and its creditors.

The Stoxx 50 index of leading European shares was down 0.4 per cent, having earlier traded more than 1 per cent lower. Germany's DAX was flat at 11,073, while the CAC-40 in France fell 0.1 per cent to 4,853.

Wall Street was poised for gains at the open, with Dow futures and the broader S&P 500 futures up 0.7 per cent, after U.S. stocks logged their worst day of the year on Monday.

Tuesday is crunch day for Greece as has a big repayment due to the International Monetary Fund. It's also the day that the country's bailout program with European creditors ends. Without an extension to the bailout program, the country will lose access to remaining rescue funds.

The fear in the markets is that the country will default on its debts and ditch the euro -- developments that could derail a fragile economic recovery.

With the deadline looming Jean-Claude Juncker, the head of the European Union's executive Commission, made a last-ditch effort to help Greece get a bailout deal, provided Greek Prime Minister Alexis Tsipras campaigns for staying in the euro.

Though no official response has been issued, some traders see the fact that there are talks as a hopeful sign.

"Deep down there is a sense that some sort of compromise will be reached before the deadline -- it's the eurozone way," said David Madden, market analyst at IG.

Greece will likely remain the focus of attention in markets this week, especially if no deal is reached. On Sunday, Greece is due to hold a referendum on the recent proposals by its creditors. The government has said it will urge a vote against.

Earlier, Asian stock markets bounced back Tuesday, recouping some of the previous day's sharp fall. In Asia, Japan's benchmark Nikkei 225 gained 0.6 per cent to 20,235.73 after dropping to its lowest point for the year Monday. South Korea's Kospi was up 0.7 per cent to 2,074.20. Hong Kong's Hang Seng rose 1.1 per cent to 26,250.03. China's Shanghai Composite jumped 5.5 per cent to 4,277.22 while Australia's S&P/ASX 200 was up 0.7 per cent at 5,459.00.

In currency trading, the euro was down 0.2 per cent at $1.1196 while the dollar fell 0.1 per cent to 132.46 yen.

In energy markets, benchmark U.S. crude was up 13 cents at $58.45 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, a benchmark for international oils, gained 39 cents at $62.40 a barrel in London.