European stocks rebound slightly despite Greek jitters

Europe's main stock markets rebounded Wednesday, reversing earlier losses as investors fished for bargain shares amid optimism over Greece.

In midday deals, London's benchmark FTSE 100 of leading companies advanced 0.42 percent to 6,782.1 points compared with Tuesday's close.

Frankfurt's DAX 30 index rose 0.81 percent to 11,089 points and the CAC 40 in Paris won 0.66 percent to 4,882.20.

In foreign exchange activity, the euro edged up to $1.1310 from $1.1280 late on Tuesday in New York.

"There has been somewhat of a turnaround ... as investors flood in to grab the European indices at their recent lows," said Spreadex analyst Connor Campbell.

"A slight slowdown in the euro-dollar (rate) has helped make the eurozone indices more attractive, even if the lack of progress on the Greek issue is still lurking in the background."

The European Commission said Wednesday it was not satisfied with Greece's new bailout reform proposals, saying they "do not reflect" earlier discussions between Brussels and Athens.

Spokesman Margaritis Schinas said the "ball is clearly in the court of the Greek government" as Brussels rejected the plan submitted by Athens just a day earlier in a bid to end a five-month stand-off and unlock vital funds.

Greek Prime Minister Alexis Tsipras had already angrily rejected the EU's own proposals, made at a dinner with European Commission chief Jean-Claude Juncker last week.

Cash-strapped Greece on Tuesday submitted new proposals to unlock talks with the EU and IMF, which have demanded tough reforms in exchange for giving Athens the final 7.2 billion euros ($8.1 billion) of its international bailout.

Financial markets remain worried about the nation's potential exit from the eurozone.

- Greek 'nightmare scenario' remains -
"The nightmare scenario remains that a deal between Greece and its creditors is struck at the 11th hour but then voted down internally within Greece," cautioned economist Jeremy Cook at brokers World First.

"If no time is left to renegotiate further, then default, capital controls and a Greek exit from the eurozone are all the more probable."

European equities had retreated Tuesday as investors tracked the latest news on stalled Greek debt talks, while HSBC bank slid on revelations of a radical overhaul.

In London on Wednesday, British-based emerging markets bank Standard Chartered saw its share price soar 5.37 percent to 1,089.50 pence on optimism over the group's outlook, as new chief executive Bill Winters began his first day in the job.

And supermarket chain Sainsbury rallied 4.82 percent to 261 pence, despite news of sliding first-quarter sales.

Sainsbury said in a trading update that same store sales excluding fuel fell 2.1 percent in the 12 weeks to June 6, compared with a year earlier.

However, the quarter-on-quarter drop was not as heavy as elsewhere in the sector, which has suffered from falling food prices and fierce competition.

Greece's ongoing bailout reform talks also kept Asian markets jittery.

Asian equities mostly fell Wednesday, with Tokyo also suffering a late sell-off as the yen rose sharply after comments from the central bank chief that the currency would probably not weaken further.

The remarks from Haruhiko Kuroda reversed morning gains in the dollar against the Japanese currency, fuelled by two US reports that gave the Federal Reserve more ammunition to raise interest rates.

Tokyo ended 0.25 percent lower, Hong Kong lost 1.12 percent and Shanghai closed down 0.15 percent, while Sydney added 0.13 percent.