Global stocks rose modestly on Monday, though gains were limited by concerns that leaders from the Group of Eight most powerful countries had failed to provide a concrete plan to ease the eurozone debt crisis.
Traders in Europe and Asia were kept on edge by worries about the economic future of Greece and whether it would exit the 17-country euro currency union.
"The defensive mood among market participants is unlikely to change soon," UniCredit analysts said in a note to clients, adding that the impending election in Greece will likely be the market driver over the next four weeks.
Anti-bailout political parties made gains in general elections in Greece earlier this month, but the ballot proved to be inconclusive. A new vote is scheduled for June 17, and the radical left party Syriza is expected to make gains. Without the rescue package, Greece will likely default and leave the eurozone. That would mean a financial disaster for Greece, but it will also send shockwaves throughout Europe.
At stake is a bailout package that Greece urgently needs to stay solvent. International lenders have threatened to cancel the package if Greece fails to follow through on its austerity plans.
Britain's FTSE 100 index gained 0.7 percent at 5,304.48 points, Germany's DAX added 0.95 percent to 6,331.04, while France's CAC 40 added 0.64 percent to 3,027.15
Early trading in the United States was mixed after a new survey by the National Association for Business Economists suggested that economists are upbeat about housing and employment but still expect consumer spending, business investment and gross domestic product to remain below historic norms.
The Dow Jones industrial average was up 0.78 percent at 12,466, while Standard & Poor's 500 was down 1.2 percent to 1,310. The Nasdaq composite index was up 1.91 percent to 2,831, with shares in social network Facebook dropping as much as 13 percent in their second day of trading.
A weekend summit in Washington among the G-8 leaders provided little in the way of encouragement for investors nervous that the political turmoil in Greece could hurt the rest of Europe and the global economy. The leaders issued a joint statement calling for measures to boost growth and lower debts, but left the actual steps to individual governments to take.
"Far from demonstrating the leaders' authority, it advertised their powerlessness in the face of forces which they cannot control and which, we may suppose, they do not comprehend," Stephen Lewis of London-based Monument Securities said in a note to investors.
European officials signaled Monday that there's still no consensus among them about possible ways out of the European debt crisis. Germany's deputy finance minister said that Berlin still opposes the new French president's idea to jointly issue bonds for the eurozone which could be used to fund economic growth.
Germany has resisted the idea of eurobonds because they would likely raise its borrowing costs and would lessen pressure for heavily indebted countries to get their finances in order.
Leaders of the 27 European Union countries will hold an informal meeting in Brussels on Wednesday, followed by a summit at the end of June at which the issues of economic growth and austerity will likely be the main point of debate. Merkel said last week that "it will be very important that Germany and France present their ideas together at this summit."
Spanish stocks trailed other European indexes, with the IBEX 35 index down 0.6 percent, as investors were spooked by last week's news that Spain's 2011 budget deficit was higher than expected.
In Asia, markets posted only muted gains. Japan's Nikkei 225 index came off four-month lows to rise 0.3 percent at 8,636.89. Australia's S&P/ASX rose 0.2 percent to 4,055.90. Mainland China's Shanghai Composite Index was 0.3 percent higher at 2,351.06. But Hong Kong's Hang Seng was down 0.3 percent at 18,893.53.
Benchmark oil for June delivery was up 77 cents to $92.28 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.08 to settle at $91.48 in New York on Friday.
In currency trading, the euro rose to $1.2778 from $1.2737 late Friday in New York. The dollar rose to 79.311 yen from 79.08 yen.
___Pamela Sampson contributed to this report from Bangkok.
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