(Reuters) – Germany dismissed a French-led call for euro zone nations to issue common bonds, a day before a European Union leaders’ summit which investors are looking to for new measures to counter the bloc’s debt crisis.

After a torrid week, stock markets rallied on optimism that the Wednesday summit would produce measures to foster growth and ward off the threat of contagion should Greece exit the euro.

The FTSEurofirst 300 index of top European shares was up 1.2 percent by 1230 GMT and Spanish and Italian borrowing costs fell, leaving scope for disappointment if the EU leaders underwhelm.  Read more