Investors welcome Greek bailout approval; Yellen lifts dollar

Stocks rose and euro zone bond yields fell on Thursday as investors welcomed Greek parliamentary approval of a bailout plan, while the dollar hit a six-week high after Federal Reserve Chair Janet Yellen reinforced expectations for a U.S. rate hike.

Relief was the dominant sentiment across European markets, ahead of the European Central Bank's monthly policy meeting later in the day, as Greece's approval of the painful measures lessens the likelihood of Athens's immediate exit from the euro zone.

The FTSEurofirst 300 index of leading European shares rose 1 percent to a six-week high of 1,602 points, continuing the upward momentum across Asian stock markets, while Spanish bond yields fell to a six-week low.

The relief is likely to be temporary, however. The political climate in Greece is fragile, it remains to be seen whether the measures approved will be implemented, and as the International Monetary Fund said this week Greece's debt is unsustainable.

Also, Germany's finance minister repeated his view on Thursday that a temporary "Grexit" is a good idea. Euro zone financial stocks outperformed, rising 1.5 percent.

"The latest Greek events should support risky assets," Unicredit said on Thursday.
Euro zone stocks rose 1 percent to 3,667 points, and Germany's DAX rose 1 percent to 11,660 points, both six-week peaks.

U.S. stock futures pointed to a rise of 0.4 percent at the open on Wall Street. Second quarter earnings reports from blue chips such as Citi, Goldman Sachs and Google are scheduled for later on Thursday.

Earlier, Japan's Nikkei rose 0.7 percent, Shanghai stocks rose 0.5 percent and MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3 percent.