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European stocks buoyed by Greek bailout activation

LONDON (AP) — European stock markets and the euro rallied Friday as Greek Prime Minister George Papandreou confirmed that he is formally requesting bailout loans from the 15 other eurozone goverments and the International Monetary Fund.

In Europe, the FTSE 100 index of leading British shares was up 39.85 points, or 0.7 percent, at 5,705.18 while Germany's DAX rose 69.47 points, or 1.1 percent, at 6,238.19. The CAC-40 in France was 25.23 points, or 0.6 percent, at 3,949.88.

Wall Street was also poised for a fairly bright opening — Dow futures were up 25 points, or 0.2 percent, at 11,093 while the broader Standard & Poor's 500 futures rose 4 points, or 0.3 percent, at 1,205.70.

Stocks, particularly in Europe, were buoyed by expectations that Papandreou — since confirmed — will activate the euro30 billion ($40 billion) bailout package from the eurozone and the IMF agreed earlier this month.

Earlier this week, the Greek government began discussions about the plan.

The discussions were expected to last at least ten days but renewed concerns on Thursday about the Greek government's ability to service its upcoming debt commitments ratcheted up the pressure on Papandreou's government.

On Thursday, jitters about Greece's financial future dominated sentiment. The European Union's statistics office said the country's budget deficit in 2009 was way more than previously thought and Moody's Investor Services downgraded its rating on the country's debt and warned of possible further downgrades.

Along with European stocks, the euro bounced amid hopes of a resolution to the Greek debt crisis — by late morning London time, the euro was up 0.4 percent at $1.3315.

"The tone in both Greek bonds and the euro has improved this morning as the markets concluded that Greece would take the offer of aid," said Jane Foley, research director at Forex.com.

"How far the euro can rally on the news that a member country is suffering the indignity of having to go cap in hand for aid in order to avoid defaulting on its debt is highly questionable," Foley added.

Though the activation of the facility has shored up confidence about Greece's near-term outlook, investors remain unsure if the country will be able to avoid a default, or at least a restructuring of its debts.

"The market believes that Greece will be forced to restructure its debt even if, or rather, when the bailout goes ahead," said Simon Derrick, a senior analyst at Bank of New York Mellon.

Strong economic data also buoyed stocks and the euro currency.

Particularly encouraging was a survey showing that German businesses are feeling more confident and are eyeing the next six months with hope.

The Munich-based Ifo Institute said its business climate index for April rose to 101.6 points from a revised 98.2 points in March. That was the second such increase in as many months, after the survey had fallen in February amid a particularly harsh winter that left snow and ice blanketing most, if not all, of Europe's biggest economy.

Meanwhile, the EU's statistics office Eurostat found industrial orders in the eurozone rising 1.5 percent in February from the month.

Earlier in Asia, Japan's Nikkei 225 stock index dropped 34.63 points, or 0.3 percent, to 10,914.46 and Hong Kong's Hang Seng lost 210.45, or 1 percent, 21,244.49.

Elsewhere, South Korea's market shed 0.1 percent, Shanghai's main index fell 0.5 percent and Australia's benchmark was down 0.5 percent.

Oil prices were little changed, with the benchmark contract up 13 cents at $83.83 a barrel.

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AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.