WORLD markets steadied after Monday’s Cyprus-fuelled sell-off as robust US economic data soothed investor nerves.

The FTSE 100 Index closed 21 points higher at 6399.4 thanks to buoyant early trading on Wall Street after a batch of encouraging figures, including better- than-expected house prices.

Germany’s Dax and the Cac 40 in France also closed in positive territory – up 0.1 per cent and 0.6 per cent respectively – after heavy falls on Monday amid fears that the plans to tax depositors in Cyprus would set a precedent across the eurozone.

There was an initial boost from Cyprus avoiding an exit from the eurozone, but this quickly faded after a senior European official said it was a template on how to keep bailout costs away from taxpayers.

In currency news, the pound suffered after more gloom on the UK retail sector following the weakest survey reading from the CBI since last August.

Sterling eased back from near six-week highs against the euro to 1.179 and slipped to 1.515 US dollars.

State-backed banking stocks remained under pressure from the bailout uncertainty, as Royal Bank of Scotland eased 1.2p to 286p and Lloyds Banking Group dropped 0.2p to 47.7p.

Eurasian Natural Resources was the biggest faller in London, down by 8.1p at 260p after topping the FTSE 100 fallers board on Monday.

Building materials group Wolseley was down 38p to 3173p after its half-year earnings were hit by Europe’s ailing economy. Pretax profits were lower at £199m, despite market share gains and growth in the US, its biggest trading region.

Catering supplies giant Compass was also among the biggest FTSE 100 fallers, down 11p to 824p, as stockbroker Numis said its share price growth looks likely to stall despite continued strong trading in North America.

Supermarket Morrisons was near the top of the risers board, up 9.3p to 276p, a three per cent gain, after Citigroup introduced a buy rating on the stock amid hopes for a trading recovery, driven by the retailer’s Nutmeg clothing range for children.

B&Q owner Kingfisher slipped 0.3p to 283p as fullyear results showed a 13 per cent fall in full-year results to £691m.