Reuters: Asian shares rose on Tuesday after Greece’s latest budget proposals raised hopes it would stave off a debt default and reach a deal with lenders later this week.

The brighter mood was expected to extend into many European markets even as some strategists remained sceptical. Financial spreadbetters predicted Germany’s DAX to gain as much as 0.7%, and France’s CAC 40 0.6%. But Britain’s FTSE 100 was called to open six points lower, or down 0.05%.

“While it would appear that the Greek government has shifted some ground towards the creditors, the measures put forward yesterday appear to differ little from the same failed policies that have brought Greece to the situation where we are today,” said Michael Hewson, chief markets analyst at CMC Markets.

“That’s not really something worth celebrating,” Hewson said in a note to clients.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.6%, while Japan’s Nikkei share average jumped 1.9% to a fresh 15-year high as investors bought back some of the shares they unloaded over three losing weeks.

“The fact that it appears that something will happen for Greece is really lifting the market’s mood,” said Ayako Sera, senior market economist at Sumitomo Mitsui Trust Bank in Tokyo.

“But these moves up are not based on fundamentals. The upside is likely to be heavy, as concerns about global growth remain,” she said.

US stock futures rose about 0.3% after Wall Street posted solid gains on Monday, with the Nasdaq Composite closing at a record high.

European Council President Donald Tusk called the Greek proposals “a positive step forward,” and said the aim was to have Eurogroup finance ministers approve a cash-for-reform package on Wednesday evening, and put it to euro zone leaders for final endorsement on Thursday morning.

Stocks gained even as upbeat US data backed the view that the US Federal Reserve is on track to raise interest rates as early as September.

The National Association of Realtors said existing home sales rose to their highest in five-and-a-half years, increasing 5.1% to an annual rate of 5.35 million units, and adding to evidence that US economic momentum picked up in the second quarter after a sluggish start to the year.

The euro skidded 0.6% to $1.1279, moving away from a one-month high of $1.1440 hit on Thursday as some cautioned that steps in a positive direction did not guarantee an eventual solution to Greece’s debt crisis.

“Although momentum appears to have turned positive, if there is no progress on negotiations for a program extension before the 30 June deadline, the ECB may have to increase haircuts on Greek assets, which could, in turn, precipitate the need for capital controls,” strategists at Barclays said.

The dollar rose about 0.3% on the day against the yen to 123.69, though it remained well below a 13-year high of 125.86 yen hit earlier this month.

Yields on US Treasuries rose in line with lower demand for safe-haven fixed income assets, and expectations of higher US interest rates this year also weighed on US debt prices. The benchmark US 10-year note yield was last at 2.381%, up from its US close of 2.362%.

Chinese shares pulled out of negative territory it had sunk into after an early rally unravelled. Investors initially took heart from a gauge of Chinese factory activity that suggested signs of stabilisation, though it also included some worrying signals.

The HSBC/Markit Flash China Manufacturing Purchasing Managers’ Index (PMI) edged up to 49.6, a three-month high, from 49.2. But it remained below the 50 mark which separates contraction from expansion and still implied that Beijing might need to muster more stimulus measures.

ECB raises emergency funding for Greek banks: Sources

Frankfurt/Athens (Reuters): The European Central Bank increased its funding lifeline to Greece’s banks again on Tuesday, sources with direct knowledge of the decision said, allowing the country’s banks to stay open as Athens inches towards a deal with creditors.

The latest increase amounted to “a bit less than one billion euros,” one of the people told Reuters. This raises the value of the ECB’s Emergency Liquidity Assistance (ELA) program to around 89 billion euros ($100 billion).

“This is following the positive signal from the leaders’ summit meeting,” the person said. Two further sources confirmed that the limit had been increased.

The move, which is the third day in a row that the ECB has sanctioned additional funding, follows Athens’ presentation on Monday of new budget proposals that euro zone leaders welcomed as the basis for possible agreement. However, Greek lawmakers reacted angrily on Tuesday, with parliament’s deputy speaker saying the government’s proposals would struggle to win approval from the legislature.

With nervous Greek savers and firms withdrawing billions of euros in cash from their accounts, the country’s banks are almost entirely dependant on central bank funding to avoid collapse and potentially dragging down the country with them.

The latest increase in ELA provides some breathing space as Greece’s Prime Minister Alexis Tsipras seeks to clinch a formal deal with euro zone backers.

If a concrete agreement is reached and there is a euro zone commitment to provide more funding, the ECB could also loosen restrictions that limit Greece’s ability to sell and fund itself with short-term debt.