By Riva Gold 

Global stocks marched higher Wednesday as rising oil prices and the prospect of a Greek debt deal helped extend a rally after weeks of listless trade.

The Stoxx Europe 600 climbed 1.1% to its highest level this month, following steep gains in Japan and Hong Kong.

Futures pointed to a 0.4% opening gain for the S&P 500. Changes in futures don't necessarily reflect market moves after the opening bell.

Technology and financial stocks led the S&P 500 to its biggest jump in more than two months on Tuesday, amid strong U.S. housing data and growing confidence that the economy could withstand a possible summer interest rate rise.

"People are realizing that rates going up is not a negative for the longer term economy -- it's a positive vote of confidence that things are going better than people hoped," said JJ Kinahan, chief strategist at TD Ameritrade.

That rally continued Wednesday, with banks and energy companies among the biggest gainers in Europe.

U.S. crude oil prices gained 1% to $49.11 a barrel, near their highest level in more than seven months.

Oil prices got a lift from expectations that production disruptions would help reduce a supply glut and after industry group API reported a surprisingly large drawdown in U.S. crude supplies. Official U.S. production and stockpiles data will be released later Wednesday by the Energy Information Administration.

"We have a stabilizing oil price, and that is comforting to the very distressed sectors associated with energy," said Sandra Crowl, member of the investment committee at French asset manager Carmignac.

Also boosting shares, eurozone finance ministers and the International Monetary Fund reached a deal early Wednesday that clears the way for fresh loans for Greece and prevents the country from defaulting on big debt redemptions in July.

Greek government bond yields fell below 7% for the first time since November before retracing slightly. Yields in Spain, Portugal, Italy and Spain also fell. Yields fall as prices rise.

Analysts said the deal reduced the risk of a summer crisis, but fell short of a long term solution to the country's debt.

"The partial agreement in Greece is positive," said Ms. Crowl, but "markets will remain volatile because of a lack of a visibility both in growth and in political events."

Despite the recent gains, many investors aren't convinced they will see great returns this year in a sluggish global economy with uncertain monetary policy. Stocks have struggled for traction in recent weeks, with the S&P 500 locked in a tight trading range.

"We're going into a period of uncertainty," said Patrick George, global head of equities at HSBC.

"Big investors are sitting on the sidelines, waiting," he said, adding that international investors have been shy of investing in Europe because of uncertainty over what shape it will have after June 23, when the U.K. holds a referendum on membership in the European Union.

Earlier, Japan's Nikkei Stock Average added 1.6%, while Hong Kong's Hang Seng Index gained 2.7% and shares in Australia gained 1.5%, bolstered by the rise in oil prices and strong finish on Wall Street.

Shares in Shanghai ended slightly lower, however, after China guided the yuan to its weakest level against the dollar in over five years.

The euro was little changed against the dollar at $1.1138 despite data showing an unexpected improvement in German business confidence.

The dollar was up 0.2% against the yen at Yen110.2380, while the British pound gained 0.5% against the dollar to $1.4685.

In metals, gold prices in London fell slightly to a seven-week low and last traded at $1,223.45 an ounce. Copper futures in London were up 0.8% at $4,621.50 a ton.

In corporate news, shares in Bayer AG edged up 0.1% following Monsanto's rejection of its $62 billion takeover offer.

Marks & Spencer Group PLC shares slid nearly 9% after the company reported a steep fall in pretax profit and warned of more pressure ahead.

Viktoria Dendrinou

contributed to this article

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

May 25, 2016 08:38 ET (12:38 GMT)