* European stocks rise, led by banks after Barclays results
* Euro zone urges Greece to make more effort on deficit
* Euro rises against dollar; oil, metal prices gain
By Dominic Lau
LONDON, Feb 16 (Reuters) - European shares gained on Tuesday
after UK bank Barclays <BARC.L> beat profit forecasts, and the
euro rose against the dollar with European finance ministers
putting pressure on Greece to resolve its fiscal problems.
Borrowing costs for Greece and other peripheral euro zone
countries rose, however.
Oil <CLc1> and metal prices advanced, supported by a weaker
U.S. currency, while investors showed more appetite for riskier
assets.
World stocks measured in MSCI All-Country World Index
<.MIWD00000PUS> put on 0.4 percent, backed by gains in Europe.
Europe's FTSEurofirst 300 <> rose 0.5 percent, with
banks the leading risers as Barclays said it had started the
year well after beating expectations with 2009 profits of over
$18 billion. The bank's shares soared 7.3 percent.
U.S. stock index futures <DJc1> <SPc1> <NDc1> rose 0.3-0.6
percent, indicating a firmer start for Wall Street.
In Asia, Japan's Nikkei average <> put on 0.2 percent.
The euro was up 0.4 percent at $1.3648 as euro zone states
urged Athens to make a greater effort to deal with its fiscal
problems, prompting short-term players to trim their short
positions.
The single currency was also helped after Germany's ZEW
index of analyst and investor sentiment fell less sharply than
expected in February, suggesting Europe's largest economy may be
more resilient than recent bearish GDP data had suggested.
[]
However, concerns that Greece's debt problems will not be
resolved quickly kept sentiment towards the euro broadly
negative and traders said it remained vulnerable to further
falls.
"The (ZEW) outturn was not as bad as expected, the index
remains above its long-run average and the fact that it is still
in positive territory means that investors see conditions
improving," said Jennifer McKeown, senior economist at Capital
Economics.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic on the ZEW index click on
http://graphics.thomsonreuters.com/0210/DE_ZEWGDP0210.gif
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Euro zone states on Monday urged Greece to take further
steps to control its budget deficit by mid-March if needed, but
did not elaborate on last week's pledge to defend the country if
market pressures spin out of control.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic on Greece's deficit-cutting plan click on
http://graphics.thomsonreuters.com/0210/GR_DFTPLN0210.gif
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GREECE PRESSED
On Tuesday, Eurogroup Chairman Jean-Claude Juncker said
Greece must step up efforts to cut its budget deficit and if
Athens failed to convince its peers within the monetary union
with its austerity measures, it faced the risk of sanctions.
[]
European officials' tough stance on Greece's deficit weighed
on the country's assets.
Greece's benchmark share index <> lost 2.8 percent,
while the premium investors demand to hold Greek government
bonds <GR10YR=RR> rather than the German benchmark widened by 30
basis points (bps) to 335 bps.
The equivalent Portuguese <PT10YT=RR> spread widened 21 bps
to 143 bps, and the Irish equivalent moved out by 8 bps to 153
bps.
"The key issue that is going to be hanging over Europe is
what is going to be happening with Greece ... because there is
still no resolution. The market desperately wants to have a
clear line," said Justin Urquhart Stewart, director at Seven
Investment Management.
Yields on benchmark 10-year Bunds <EU10YT=RR> were steady at
3.200 percent, while those on 10-year Treasuries <US10YT=RR>
were up 1 basis point at 3.706 percent.
In commodities, crude prices rose 1.7 percent to above $79 a
barrel, helped by the weaker dollar, while copper prices <MCU3>
gained 1.9 percent.
The dollar <.DXY> fell against a basket of major currencies
and was down 0.06 percent against the yen at 89.95.
(Additional reporting by Jessica Mortimer, George Matlock and
Harpreet Bhal in London; editing by John Stonestreet)
