May 05, 2015 07:48 AM EDT

European markets buck China concerns

European markets opened firmer on Tuesday after an extended weekend break, bucking fears of slowing demand from China and despite debt stand-off fears depressing Greek stocks.

The pan-European FTSEurofirst 300 equity index was up 1 percent, with UBS shares gaining more than 7 percent the bank reported its highest quarterly profit in nearly five years and said it was in advanced U.S. talks to settle allegations of foreign-exchange-market rigging.

Britain's FTSE 100 index was up 0.9 percent after a three-day weekend and Germany's DAX rose more than 1 percent, helped by Infineon raising its 2015 outlook.

Greece's debt stand-off with international creditors sent the ATG benchmark index down 2 percent. Differences over pension and labor reforms are dogging intensive negotiations as the country's cash position becomes increasingly critical.

Fears of an imminent crisis pushed up low-rated euro zone bond yields and the euro eased a little against the U.S. dollar.

"We really do think time is running out over Greece. Everything has pointed to this being the week in which a deal needs to be done," Charles Stanley market analyst Jeremy Batstone-Carr said.

"Greece is having huge difficulties making payments to the IMF, and the IMF is in no mood to soften its stance."

Data from China, Taiwan and Japan showed factory activity contracting, while Australia's central bank cut interest rates for the second time in four months as the region's growth falters in the face of slowing Chinese demand.

The Shanghai Composite Index fell more than 4 percent, fueled by media reports of tougher margin requirements by some brokerages. That added to concerns about market liquidity ahead of new share listings.

While some questioned the effectiveness of additional central-bank easing, London nickel hit a five-week high and copper held near a four-month peak as traders digested the prospect of further monetary stimulus.

"Whilst China certainly needs to loosen monetary policy further, it is by no means set to conduct QE (bond-buying) or other unconventional measures," Jefferies' global equity strategist Sean Darby said.

In commodities, Brent crude oil futures slipped towards $66 a barrel, falling from a 2015 high, as Saudi Arabia considered halting bombing in Yemen to allow the delivery of aid, which eased concerns about oil supply from the Middle East.

A stronger U.S. dollar also weighed on the dollar-denominated commodity, while investors waited for data on U.S. commercial crude inventories later this week for more direction.

Cheaper fuel prices helped airline Lufthansa report improved first-quarter earnings, though the company said further action was needed to lower costs. The STOXX Europe 600 travel and leisure index was up 1.5 percent.

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