Calm ruled Europe's stock, currency and markets on Friday as Greece inched closer to a default later this month.

Greek shares rose even though talks over a new debt deal broke down on Thursday, the euro was down just 0.3 percent against the dollar and major European stock markets gained in early trade.

That in part reflected gains in Asia, where traders said markets were still reacting to a Federal Reserve meeting on Wednesday, when the Fed seemed more cautious on the idea of raising U.S. interest rates this year.

"We're really only up on the back of the strength in the U.S., but I'd still be inclined to sell the rallies because of the Greek situation. It would be a brave man who goes in 'long' into the weekend," said Richard Griffiths, associate director at Berkeley Futures.

Italian government bond futures FBTPc1, the yardstick for bonds issued by the euro zonecountries most vulnerable to contagion from Greece, fell in early trade, then recovered to trade higher. Italian 10-year yields were last up 1.4 basis points at 2.27 percent.

The subdued reaction of many markets in recent weeks reflects the argument that the exposure of Europe's private sector to Greece is now minimal and that a default or even its departure from the euro may have little effect.

The pan-European FTSEurofirst 300 index .FTEU3 rose 0.7 percent, including gains for Spanish and Italian stocks.

Asian shares earlier had risen for a third consecutive day .MIAPJ0000PUS, although optimism was tempered by another 6 percent fall in Shanghai .SSE, now down more than 13 percent for the week.

Regulators moved again this week to tighten margin financing in China - a key factor in the market's rally this year - and a round of initial public offerings has also increased share supply.

"First ... room for further monetary easing could be less than anticipated, and inflows of new investors could have already peaked," Bosera Asset Management Co said in a note to clients on the correction.

"Secondly, a highly-leveraged bull (market) is not sustainable," Bosera said, citing moves by the government to reduce margin loans, which the asset manager estimates have reached between 3 trillion and 4 trillion yuan.

In commodities, oil prices were weaker, but output was broadly met by demand.

U.S. crude futures CLc1 edged lower to $60.33 a barrel. Brent LCOc1 gained 10 cents to $64.35.

By Patrick Graham - Reuters (Additional reporting by Samuel Shen, Pete Sweeney in Shanghai and Hideyuki Sano in Tokyo; Editing by Larry King)