Asian shares ride China bounce, euro soars on Greek hopes

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Asian shares and the euro gained on Friday as investors took heart from strength in recently volatile Chinese markets, and after Greece's offer of a new reform plan raised hopes of a deal at a weekend summit of European leaders.

Chinese stocks rallied for a second day, buoyed by a raft of Beijing's support measures and appeared to calm investors after panic-selling slashed a third of the value off mainland markets since its peak in June.

The luster was expected to rub off on European shares, with financial spreadbetters expecting Britain's FTSE 100 to open up as much as 0.8 percent, Germany's DAX 2.1 percent higher, and France's CAC 40 is seen opening up 1.8 percent.

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"Greece is also aiding sentiment and traders are expressing the view that 'Greece is solved, get involved,' or words to that effect. The new proposals that have been announced in the early Asian session have seen a strong move higher in U.S. futures and our opening European calls also look strong," Chris Weston, chief market strategist at IG, said in a note.

Greece's new proposals included a tax hike on shipping companies and scrapping tax breaks for its islands, as well as a higher value-added tax for restaurants and a firm timetable for privatizations.

The Greek government will ask for parliament's approval on Friday to negotiate on the text of "prior actions" that could form the basis of a cash-for-reforms deal with creditors, a government source said.

MSCI's broadest index of Asia-Pacific shares outside Japan extended early gains and was up 1.3 percent, but was still on track for a weekly loss over 3 percent in a period marred by a savage correction in Chinese stock markets.

Shanghai's benchmark composite index was up 5.3 percent, while the CSI300 index of the largest listed companies in Shanghai and Shenzhen added 6 percent.

U.S. stock futures also rose, with S&P 500 mini futures jumping 1.2 percent from late U.S. levels.

Japan's Nikkei stock index 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 of this drop is that valuations have become more attractive, which was drawing buying by 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.

The euro soared, adding 0.8 percent to $1.1126, while the dollar gained 0.5 percent against the safe-haven yen to 121.95 yen.

The euro jumped 1.3 percent to 135.63 yen, recovering from a six-week low of 133.30 yen, as investors decided they saw light at the end of Greece's debt tunnel.

Germany, Athens biggest creditor, also made a small concession on Thursday by acknowledging that Greece will need some debt restructuring as part of the new program to make its public finances viable in the medium-term.

China's gains and hopes on a deal for Greece bolstered Asian shares throughout the session, though many investors remained uncertain of a best-case outcome for the Greek crisis.

Investors are also not sure if the worst is over for China markets in the short term, and the costs of heavy-handed state intervention in equities are likely to weigh on the market for a long time.

In commodities trading, crude oil futures were higher but remained on track for steep weekly losses.

U.S. crude was trading up 1.1 percent at $53.35 per barrel, more than 6 percent below last Friday's close. Brent crude was up about 1.1 percent on the day at $59.24 a barrel, but still down nearly 2 percent for the week.

See photos of China's stocks taking a hit:

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Asian shares ride China bounce, euro soars on Greek hopes
A man holds prayer beads while monitoring stock prices at a brokerage house in Beijing Monday, July 13, 2015. Chinese authorities have accused securities firms of manipulating share prices and allowing improper trading during the country's market plunge, in a possible effort to deflect blame for investor losses totaling several trillion dollars. (AP Photo/Andy Wong)
A man checks on stock prices at a brokerage house in Beijing Monday, July 13, 2015. Chinese authorities have accused securities firms of manipulating share prices and allowing improper trading during the country's market plunge, in a possible effort to deflect blame for investor losses totaling several trillion dollars. (AP Photo/Andy Wong)
FILE - In this Friday, July 10, 2015, file photo, a Chinese investor monitors stock prices as he sits in a brokerage house in Beijing. Asian stocks rose for a second day on Friday as the Greek government proposed a broad financial overhaul to its creditors and Beijing's attempts to arrest a sharp slide in the Chinese market appeared to be working. However, most Asian markets were still in the red from a week earlier. (AP Photo/Mark Schiefelbein, File)
QINGDAO, CHINA - JULY 03: (CHINA OUT) Investors observe stock market at a stock exchange hall on July 3, 2015 in Qingdao, Shandong Province of China. Chinese shares continued to decline on Friday. the benchmark Shanghai Composite Index depreciated 5.77%, to at close at 3682.92 pointes, lowest point on Friday. (Photo by ChinaFotoPress/ChinaFotoPress via Getty Images)
SHANGHAI, CHINA - JULY 03: (CHINA OUT) An investor observes stock market at a stock exchange hall on July 3, 2015 in Shanghai, China. Chinese shares continued to decline on Friday. the benchmark Shanghai Composite Index depreciated 5.77%, to at close at 3682.92 pointes, lowest point on Friday. (Photo by ChinaFotoPress/ChinaFotoPress via Getty Images)
Investors talk to each other as they check stock prices at a securities firm in Wuhan, in central China's Hubei province on July 3, 2015. Shanghai shares on July 3 extended their plunges of recent weeks, ending the morning session down more than three percent in volatile trading as analysts said panic was setting in. CHINA OUT AFP PHOTO (Photo credit should read STR/AFP/Getty Images)
Investors monitor stock prices at a securities firm in Wuhan, in central China's Hubei province on July 3, 2015. Shanghai shares on July 3 extended their plunges of recent weeks, ending the morning session down more than three percent in volatile trading as analysts said panic was setting in. CHINA OUT AFP PHOTO (Photo credit should read STR/AFP/Getty Images)
Investors talk to each other as they check stock prices at a securities firm in Wuhan, in central China's Hubei province on July 3, 2015. Shanghai shares on July 3 extended their plunges of recent weeks, ending the morning session down more than three percent in volatile trading as analysts said panic was setting in. CHINA OUT AFP PHOTO (Photo credit should read STR/AFP/Getty Images)
Investors talk in front of a board displaying share prices at a security firm in Shanghai on July 1, 2015. Shanghai shares closed down more than five percent on July 1, resuming their downward trajectory a day after recording their biggest gains in more than six years. AFP PHOTO CHINA OUT (Photo credit should read STR/AFP/Getty Images)
An investor checks share prices at a security firm in Shanghai on July 1, 2015. Shanghai shares closed down more than five percent on July 1, resuming their downward trajectory a day after recording their biggest gains in more than six years. AFP PHOTO CHINA OUT (Photo credit should read STR/AFP/Getty Images)
Investors talk in front of a board displaying share prices at a security firm in Shanghai on July 1, 2015. Shanghai shares closed down more than five percent on July 1, resuming their downward trajectory a day after recording their biggest gains in more than six years. AFP PHOTO CHINA OUT (Photo credit should read STR/AFP/Getty Images)
An investor walks past a share prices board at a security firm in Hangzhou, eastern China's Zhejiang province on June 30, 2015. AFP PHOTO CHINA OUT (Photo credit should read STR/AFP/Getty Images)
People walk past an electronic display showing the Hang Seng Index on June 30, 2015. Asian markets rebounded after the previous day's rout, despite Greece being just hours away from default, while Shanghai surged in volatile trading that saw swings of more than eight percent. AFP PHOTO / ISAAC LAWRENCE (Photo credit should read Isaac Lawrence/AFP/Getty Images)
TO GO WITH China-economy-stocks, FOCUS by Fran Wang This photo taken on June 26, 2015 shows an investor checking the share prices in a stock firm in Fuyang, east China's Anhui province. When China's main share index hit a seven-year high earlier this month, it topped off a run that had seen it more than double in value over the past year, placing it among the world's top performers. AFP PHOTO CHINA OUT (Photo credit should read STR/AFP/Getty Images)
Investors check share prices in a stock firm in Fuyang, east China's Anhui province on June 29, 2015. Chinese shares plunged in morning trading on June 29, extending losses from the past two weeks despite a surprise interest rate cut at the weekend. AFP PHOTO CHINA OUT (Photo credit should read STR/AFP/Getty Images)
TO GO WITH China-economy-stocks, FOCUS by Fran Wang This photo taken on June 26, 2015 shows an investor checking the share prices in a stock firm in Fuyang, east China's Anhui province. When China's main share index hit a seven-year high earlier this month, it topped off a run that had seen it more than double in value over the past year, placing it among the world's top performers. AFP PHOTO CHINA OUT (Photo credit should read STR/AFP/Getty Images)
A Chinese stock investor monitors share prices at a securities firm in Fuyang, in China's Anhui province on June 19, 2015. Shanghai shares plunged 6.42 percent on June 19, ending a torrid week as the benchmark index was hit by tight liquidity and profit-taking after a powerful surge over the past year. CHINA OUT AFP PHOTO (Photo credit should read STR/AFP/Getty Images)
Chinese stock investors react as they check prices at a securities firm in Fuyang, in China's Anhui province on June 19, 2015. Shanghai shares plunged 6.42 percent on June 19, ending a torrid week as the benchmark index was hit by tight liquidity and profit-taking after a powerful surge over the past year. CHINA OUT AFP PHOTO (Photo credit should read STR/AFP/Getty Images)
A Chinese investor takes a nap in a brokerage house in Beijing, Friday, July 10, 2015. Asian stocks rose for a second day on Friday as the Greek government proposed a broad financial overhaul to its creditors and Beijing's attempts to arrest a sharp slide in the Chinese market appeared to be working. But most Asian markets were still in the red from a week earlier. (AP Photo/Mark Schiefelbein)
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