Italy's debt woes were back in focus today after the country's long-term cost of borrowing remained unsustainably high.
Authorities in Rome sold 2.5 billion euros (£2.1 billion) of ten-year bonds at an interest rate of 6.98%, which was below the 7.56% seen in a similar auction last month but still extremely high.
The sale maintained the pressure on the euro, which has been at a 10-year low against the Japanese yen and 11-month low against the US dollar, but investors on European stock markets took the developments in their stride.
The FTSE 100 Index was 8.7 points higher at 5515.8, while the Cac-40 in Paris and the Dax in Frankfurt also edged higher.
A number of updates on the progress of the US economy were set to test confidence later in the session, with weekly jobless claims, the Chicago business activity index and pending home sales due for release.
A five-day rally for US markets came to a sudden end yesterday, with the Dow Jones Industrial Average down more than 1%.
In London, banks were among the biggest risers following the latest Italian debt auction, with Royal Bank of Scotland up 0.3p at 20.1p and Lloyds Banking Group 0.25p stronger at 25.3p.
Next was up 22.5p at 2710.5p ahead of a trading update next week, but the rally seen yesterday for Marks & Spencer proved short-lived as its shares were 2.5p lower at 306.1p.
B&Q owner Kingfisher also fell 1.4p to 244.6p but there was better luck for Superdry owner SuperGroup after its shares rallied 4% or 17.3p to 504p.
Elsewhere in the FTSE 250 Index, shares in betting exchange Betfair were 3% lower after a technical glitch reportedly forced it to void all bets on a race at Leopardstown. The stock fell for a second successive session, down 23.75p at 757.75p.
Meanwhile, shares in bus maker Optare were 12% lower at 0.525p after rival Alexander Dennis said it was no longer interested in gatecrashing the firm's existing deal to hand a 75% stake to India's Ashok Leyland.
The Indian bus maker owned by the Hinduja Group already holds a 26% stake in Optare and recently announced its intention to treble it to 75% in a deal that should secure the future of the North Yorkshire-based business.
A vote on the share placing is due to take place next week.