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European Stocks Seen Higher; Greece Worries Continue

European stock index futures pointed to a higher open on Thursday, adding to the previous session's recovery rally, as a report that China is interested in buying "bailout bonds" for Portugal helped improve sentiment.

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The Financial Times reported on Thursday that China and other Asian investors are expected to buy a "strong proportion" of Portuguese bailout bonds when the euro zone's rescue fund starts auctioning them next month, citing senior fund officials.

On Wednesday, the Greek government scrambled to resolve a stand-off with its opposition over austerity measures while Greece's EU commissioner warned that its euro membership was at risk if it failed to agree to sacrifices.

German Finance Minister Wolfgang Schaeuble told business daily Handelsblatt in an interview published on Thursday that any possible restructuring of Greece's sovereign debt is dangerous for the country's solvency.

"Now we have Greek yields blowing out again and of course it makes people nervous," said Bronwyn Curtis, Head of HSBC Global Research.

"We have increased what we hold in cash ... so we've taken some risk off the table. I think that's what most people are doing," he said.

In Asia stocks rose led by commodities and consumer sectors and in the US there were modest gains on the news that gasoline demand was stabilizing.

The pan-European FTSEurofirst 300 index of top shares ended 0.7 percent higher on Wednesday, while the blue chip Euro STOXX 50 rose 0.6 percent to 2,817.54 points.

However, fears that a restructuring of Greek debt would trigger big writeoffs for European banks and open the door to more haircuts among debt-stricken countries in the euro zone have kept equity investors on edge, with the euro zone's Euro STOXX 50 index down nearly 7 percent so far this month, on track to record its worst monthly performance since November.

There were gains of 2.2 percent for the STOXX Europe 600 Banks index, with German Commerzbank bank up 5.7 percent and French bank Credit Agricole up 2.5 percent.

In Frankfurt, the Deutsche Bank AGM takes place on Thursday.

The euro fell to another record low against the Swiss franc to 1.2270, amid Greek debt concerns and traders said the currency was likely to fall further against the dollar on Thursday.

“For now, there is euro demand around $1.40, but it’s just a matter of time before it goes significantly lower,” said Greg Salvaggio, vice president of trading at Tempus Consulting.

The G8 summit begins in Deauville, France on Thursday with Middle East unrest, NATO action in Libya, the Fukushima nuclear crisis and the global economy all on the agenda.

In Berlin, European Central Bank president Jean Claude Trichet is due to speak at the International WDR Europa Forum.

UK luxury group Burberry reported a 40 percent jump in full year pre-tax profits on Thursday, slightly outperforming expectations.