LONDON (AP) — Markets rallied on Friday as investors clung to hopes that Europe will come up with a comprehensive plan to deal with its crippling debt crisis, even though a few days later than initially thought.
Stock markets in Europe and the U.S., as well as the euro itself, traded substantially higher despite the surprise news Thursday that a European debt deal won't be clinched in time for a summit on Sunday. Germany and France said a second meeting is tentatively scheduled for Wednesday.
Sunday's summit was supposed to deliver a comprehensive plan to finally get a grip on the currency union's debt troubles by detailing new financing for debt-ridden Greece. It also was supposed to produce plans to make Europe's banks fit to sustain worsening market turbulence and further empower the eurozone bailout fund.
But Europe's two biggest economies were at loggerheads over how to make best use of the bailout fund, the so-called European Financial Stability Facility, or EFSF. While France is proposing to turn it into a bank, which would have access to unlimited credit from the European Central Bank, Germany appears reluctant to sanction such a move.
"The news of a delay in the announcement of a deal on resolving certain aspects of the eurozone debt crisis failed to dent confidence," said Derek Halpenny, an analyst at the Bank of Tokyo-Mitsubishi UFJ.
However, he said the risks remain for assets such as stocks and the euro, as the delay "highlights the difficulties Europe is having in reaching a final resolution to the crisis."
Traders will continue to monitor news on a meeting of the eurozone's 17 finance ministers later Friday in Brussels, ahead of the arrival of their leaders over the weekend.
For now though, stocks and the euro are holding their own, as they have largely done so over the past few weeks.
In Europe, Germany's DAX rose 3.3 percent to 5,956 while the CAC-40 in France rose 2.3 percent to 3,157. The FTSE 100 index of leading British shares was 2 percent higher at 5,492.
The euro was up 0.8 percent at $1.3874.
In the U.S., the Dow Jones industrial average was 1.8 percent higher at 11,743 while the broader Standard & Poor's 500 index rose by the same rate to 1,238.
Earlier, Asian gains were muted after a sluggish start of the trading day.
Japan's Nikkei 225 index closed little changed at 8,678.89 while Hong Kong's Hang Seng added 0.2 percent to 18,025.72.
Mainland Chinese shares lost ground, with the benchmark Shanghai Composite Index falling 0.6 percent to 2,317.28, its lowest close in 31 months. The Shenzhen Composite Index lost 1.6 percent to 959.12.
In the oil markets, prices were steady. Benchmark crude for December delivery was up 7 cents at $86.17 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 22 cents to settle at $86.07 in New York on Thursday.
Pamela Sampson in Bangkok contributed to this report.