European markets rally on Greek bailout hopes

European markets are flying high on the back of fresh hopes a solution to the Greek debt crisis can be found along with positive economic news emanating from Japan.

London's FTSE breached the 6,000 mark shortly after 11am, advancing 1.08%, or 64 points, to 6002 whilst Germany's Dax had climbed 2.09% and France's Cac 40 has edged up 1.5%.

All three gauges had since fallen back slightly by 12.30pm.

Markets were lifted by reports Germany - which has resisted extra funding to Greece - is set to offer concessions to the embattled nation which could pave the wave for a fresh Greek bailout.

The Wall Street Journal report said Germany is also considering dropping its demand for an early re-scheduling of Greek bonds.

The speculation sent the Euro flying to a three-week high against the dollar to $1.4423.

European banks, some of which have exposure to Greek debt, consequently saw their share prices climb with Deutsche Bank and Societe Generale among the heavyweight risers.

A fall in the German unemployment rate, coming after retail sales in the country rose 0.6% in April, also added to the positive sentiment.

Markets boosted, too, by data showing Japan's factory output rose 1% in April in an indication its manufacturing sector is rebounding. In a strong overnight showing in Asia, Japan's Nikkei 225 index rose 2% whilst Hong Kong's Hang Sang advanced 2.2%.