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By Bloomberg

Greek stocks headed for their biggest rally in three months, leading European shares higher as investors speculated on the outcome of the country’s debt talks.

The Stoxx Europe 600 Index advanced 0.5 percent to 398.58 at 2 p.m. in London. Shares pared gains of as much as 0.9 percent after European Central Bank President Mario Draghi said there was no credible perspective yet on a Greek deal. Greece’s ASE Index added 4.6 percent, for the biggest gain among western- European markets.

As long as the Greek negotiations continue, “some think there’s potentially a deal at the end of this process,” said Stewart Richardson, chief investment officer at RMG Wealth Management LLP in London. “There’s a bit of optimism that there’s more progress.”

Greek Prime Minister Alexis Tsipras said he will press creditors to be realistic about what his country can accept as they prepare to deliver a final proposal on its debt. Tsipras, who also put forward his own plan, meets European Commission President Jean-Claude Juncker in Brussels on Wednesday evening.

The ECB kept interest rates on hold at record lows as data signaled that the risk of deflation in the euro area is waning.

Speaking at a press conference after the announcement, Draghi said monetary policy stimulus is filtering through to the real economy, and insisted the central bank needs to stick with the program to its conclusion.

ECB Forecasts

He also unveiled economic forecasts for a pickup in growth and inflation in the next three years similar to the outlook in March, saying it’s dependent on “full implementation” of stimulus.

Royal Ahold NV gained 5.2 percent and Delhaize Group climbed 7.1 percent after people familiar with the matter said that merger talks between the two retailers are progressing. Syngenta AG climbed 1 percent as it was said to be working with Monsanto Co. to iron out regulatory concerns that could stymie the U.S. company’s proposed takeover of its Swiss rival.

“A bit of deal activity is helping market sentiment,” said Richardson. “If companies are comfortable enough to do a deal it must be good news for stock prices.”

Credit Suisse Group AG advanced 3.6 percent. RBC Capital Markets upgraded its rating on the lender to the equivalent of buy, citing the possibility of strategic changes when Tidjane Thiam takes over as chief executive officer next month.

Cable provider Altice SA slid 1.2 percent as rivals Telefonica SA and Bouygues SA set up a joint venture to offer telecommunications services to multinational companies.

Amadeus IT Holding SA, a Spanish operator of travel booking systems, tumbled 11 percent, the most in at least five years, after Deutsche Lufthansa AG announced a charge for external bookings.