LONDON (TheDeal) -- European markets rose on Wednesday after European leaders gave Greece a Sunday ultimatum for a final rescue deal or face eviction from the euro. Meanwhile in Asia, the Chinese stock rout dampened the mood in other major markets.
In London, the FTSE 100 was 0.50% higher at 6,464.33, while on the mainland, the DAX gained 0.33% to 10,711.71 in Frankfurt and the CAC 40 added 0.78% to 4,640.60 in Paris.
Optimism about an imminent end to the Greek cliff-hanger -- Grexit or otherwise -- also buoyed the Portugal Stock Index up 1.03%. The Athens Stock Exchange Index was closed.
Greece now has until Thursday to present a new plan with concrete reforms, to be discussed at a Sunday summit in Brussels to decide whether or not to evict Greece from the single-currency club it joined in 2001. There are still a lot of unknowns and high emotions over the situation, but as one expert noted at least the rhetoric seems to have softened and all sides are still talking to each other.
Looking at individual stocks, Novartis (NVS - Get Report) was up a day after the Swiss drug maker gained early U.S. approval for its new heart failure medicine, called Entresto. It's the first drug of its kind to reduce the strain on the heart and thus reduce the risk of death and hospitalization among patients.
Entresto is currently being reviewed by health authorities in other parts of the world, including Canada, Switzerland and the E.U., and Novartis estimates that it could achieve peak sales above $5 billion.
Holcim (HCMLY) was also higher in Zurich after declaring its public exchange offer for France's Lafarge (LFRGY) successful. As of Tuesday, shares representing at least 81.47% of Lafarge's voting rights were tendered to the offer, well above the two-thirds minimum threshold on which the offer was conditional.
Final results of the tender offer are due out Thursday. Lafarge shares rose higher in Paris.
Shareholders in Lafarge who tender their shares will receive nine Holcim shares for 10 Lafarge shares. The deal will combine the world's two largest cement makers and create an entity with combined sales of 33 billion Swiss francs ($35 billion) and operations in 90 countries.
Among decliners, GVC Holdings retreated 2.5% in London. The company, based on the Isle of Man, posted record first-half earnings and said it's on track to achieve full-year forecasts. But it's keeping a close watch on developments in Greece, where it has a presence through its partner, Centric Multimedia.
The company said it's too early to know the implications of the situation, and whether they will have a material effect on its Greek operations in the second half. GVC said its joint offer for Bwin.party Digital Entertainment with Canada's Amaya (AYA) remains on the table, reportedly worth £900 million or 110 pence a share.
But there were bigger storm clouds hovering in Asia, where the downward spiral in Chinese stocks sent the Shanghai Stock Exchange Composite Index down a further 5.9%. The selloff spread to Hong Kong, where the Hang Seng shed 5.84% to 23,516.56 and Tokyo, where the Nikkei erased 3.14% to 19,737.64.
Trying to reassure investors, the People's Bank of China promised to provide "ample liquidity" to the stock market to protect against systemic risks, while the state-owned China Securities Finance said it will buy more shares of small and medium-sized listed companies to ease liquidity.
Later today, all eyes will be on the U.K. as Chancellor of the Exchequer George Osborne is expected to announce welfare spending cuts when he delivers his budget, starting at around 12:30 p.m. local time.
Then attention shifts to the U.S., where the Federal Reserve is due to release minutes from its June policy meeting and consumer credit data for May.