Hopes of Greek Progress Shore Up Markets LONDON (AP) - Markets clawed back lost ground Tuesday on hopes that Greece is heading toward a conclusion of debt-reduction talks with private creditors and that it may secure its second bailout package this week. Late Monday, following the agreement by a large majority of countries in the European Union to sign a new treaty designed to stop overspending in the eurozone, Greece's Prime Minister Lucas Papademos indicated that progress was being made. "It is likely that the market will initially cheer an agreement should it be reached reflecting reduced concerns that Greece will default disorderly in March," said Lee Hardman, an analyst at Bank of Tokyo-Mitsubishi UFJ. Though Greece remains the epicenter of Europe's debt crisis, leaders are pushing ahead with other plans to tie economies together. The new treaty, commonly known as the fiscal compact, was agreed at a summit. Only Britain and the Czech Republic opted out of the deal that is meant to make it more difficult for countries to run up massive debts, like the ones that are currently roiling the 17-nation eurozone. The hope among participants is that the tighter rules will restore confidence in their joint currency and convince investors that all of them will get their debts under control. For now, investors appear to be giving European policymakers the benefit of the doubt especially as there are hopes a second bailout of Greece will agreed alongside a debt-reduction deal between the country and its private creditors, possibly as soon as this week. In Europe, the FTSE 100 index of leading British shares was up 0.9 percent at 5,719 while Germany's DAX rose 1 percent to 6,508. The CAC-40 in France was 1.2 percent higher at 3,305. Wall Street was poised for a solid opening - Dow futures and the broader S&P 500 futures were both up 0.5 percent. The improvement in sentiment was evident in the currency markets too where the euro was up 0.4 percent at $1.3193. The euro often garners support when investors look to take on more risk. Despite the more optimistic backdrop Tuesday, Europe's debt woes remain the main worry in the markets. A growing fear is that Portugal may also need to get private creditors to reduce their debts, even though Europe's leaders say Greece's debt-reduction deal is a one-off. Portugal's borrowing costs have been rising consistently to record highs over recent days as the economy shows few signs of improving "The market also has Portugal in its spotlight as regards the potential default risk, and the Portuguese 10-year yield opened just above the 18 percent level this morning," said Neil MacKinnon, global macro strategist at VTB Capital. Earlier in Asia, solid Japanese industrial data helped stocks rally. Tokyo's Nikkei 225 rose 0.1 percent to 8,802.51 after data showed December industrial activity rose 4 percent over the previous month. Hong Kong's Hang Seng gained 1.1 percent to 20,383.3 and Seoul's Kospi was up 0.8 percent at 1,955.79. China's benchmark Shanghai Composite Index was up 0.3 percent at 2,292.61 ahead of Wednesday's release of a key manufacturing index. Investors are hoping for a loosening of credit curbs if it shows activity is slowing amid lackluster global demand. Oil prices tracked equities higher - benchmark oil for March delivery was up 98 cents to $99.76 per barrel in electronic trading on the New York Mercantile Exchange. Joe McDonald in Beijing contributed to this report.