MILAN -- World stock markets moved higher Friday on hopes that central banks will act to keep any political instability in Greece following weekend elections from destabilizing the global economy.
U.S. stock indexes opened higher after gains in Asia in Europe.
Uncertainty ahead of the Greek elections weighed on sentiment, but it was limited by the prospect that central banks would intervene in markets if political parties opposed to terms of the Greek bailout win the election Sunday.
Investors fear that reneging on austere bailout terms would force Greece to leave the euro currency union, with uncertain consequences for financial markets and the global economy.
Britain's FTSE 100 rose 0.6% to 5,497 while Germany's DAX gained 1.1% to 6,205. France's CAC-40 rose 1.67% at 3,083.
In Asia, Japan's Nikkei 225 closed flat at 8,569.32, but Hong Kong's Hang Seng jumped 2.3%.
The Bank of England and the U.K. government said they stand ready to offer up to 140 billion pounds ($217 billion) in cheap loans to lenders that might have trouble raising money from credit markets, which could tighten up if the Greek elections' results spook investors.
The European Central Bank, meanwhile, continues to offer unlimited amounts of cheap short-term loans as well, even though its chief, Mario Draghi, has warned that Europe's governments need to make bold decisions to shore up confidence in the euro.
Draghi said Friday the ECB has supported banks against the ongoing debt crisis with €1 trillion ($1.26 trillion) in emergency credit now it is the governments' turn to act.
Germany, however, is reluctant to accept any big moves that might cost Berlin more money, such as jointly-issued eurobonds. Any solutions would be announced at a June 28 summit of world leaders.
"I think Europe will do something because they have to save Greece and Spain. If they don't, it will be the end of Europe," said Francis Lun, managing director of Lyncean Holdings in Hong Kong. "I think maybe the worst is over. I think we have reached the nadir. Finally they have been pushed to do something."
Illustrating the urgency of the situation, Spain and Italy, which would be too expensive for Europe to bail out, have seen their borrowing rates jump this week. Should the two countries find it too expensive to finance themselves, they would need money from Europe's bailout funds. The problem is their combined financing needs dwarf what EU countries could provide.
Spanish Prime Minister Mariano Rajoy has asked EU leaders to push the European Central Bank to restart a program of purchases of government bonds that helped ease the country's borrowing rate last fall. The ECB, however, remains reluctant to do so, saying it would only temporarily relieve symptoms of underlying problems that need fixing by European governments.
In the U.S., speculation has grown that the U.S. Federal Reserve is preparing to pump more money into the economy to breathe life into its fitful recovery. Weak employment figures from the Labor Department showed hiring remains slow while inflation remains tame.
Elsewhere, benchmark stock indexes in Singapore, Taiwan, mainland China and India closed higher. South Korea's Kospi fell 0.7%.
Benchmark oil for July delivery rose 76 cents to $84.67 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.29 cents to finish at $83.91 per barrel on the Nymex on Thursday.
In currencies, the euro rose to $1.2612 from $1.2600 late Thursday in New York. The dollar fell to 78.76 yen from 79.27 yen.
USA Today