Markets await final Greek bailout deadline

The outcome of Greek bailout talks in Europe should be known by the time the Australian share market opens on Monday.

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The outcome of final talks on a Greek bailout deal will determine whether Australian shares start the week in the red or black.

Sunday is the final deadline for an agreement to stop Greece crashing out of the euro.

"It still seems 50/50 whether Greece will get the bailout deal through or not or whether they will have to prepare for exiting the Eurogroup," CommSec chief economist Craig James said.

US and European stocks rallied on Friday as the latest bailout proposal from Greece lifted hopes for a breakthrough with its European creditors this weekend, which would normally point to a stronger opening for Australian shares.

Instead the direction will be determined by news about the possibility of a "Grexit" - Greece's exit from the single euro currency - before local trading begins at 10am (AEST) on Monday.

AMP Capital chief economist Shane Oliver said if a deal was announced that would be positive for the Australian market.

"If there's no deal then we could come off a bit, and then we'd have to see how we go on the path towards a Grexit," Dr Oliver said.

If an agreement cannot be reached it is expected to heighten uncertainty on global markets, with Mr James predicting Australian shares could fall by as much as two per cent.

"Up to now the markets have rallied on the prospect that Greece has come out with some credible bailout proposals but if they don't get accepted at the end of day certainly markets will reverse course very, very quickly," he said.

"If the European leaders actually come out and reject the latest proposals and it doesn't look as though there's any resolution, our market could fall as much as two per cent."

If a deal is reached the Australian share market could rise by as much as 50 points, he said.

"If there's some stalling, perhaps continued talks, then certainly our market would be much more subdued," he added.

Euro zone finance ministers were resuming talks in Brussels on Sunday (1900 AEST), five hours before European Union leaders were to meet to decide on Greece's fate in the euro zone.

Mr James said investors will also focus on trade and economic growth data out of China and Australian business and consumer confidence readings this week.