European markets have recovered most of their early losses despite concerns that Italy may be the latest country to fall victim to the eurozone crisis.
At close, the FTSE 100 stood at 5510.82, a fall of 0.3 per cent from its opening price, while the French Cac 40 and the German Dax were both down 0.6 per cent.
Markets across Europe fell by around 2 per cent in early trades as concerns were raised over political uncertianty in Italy. The yield on Italian 10-year bonds rose from 6.37 per cent to a high of 6.64 per cent, before falling back slightly. Prime Minister Silvio Berlusconi is set to face a vote on public finance tomorrow.
Meanwhile, Greek prime minister George Papandreou has stepped down to make way for a unity government of all political parties, despite winning a vote of confidence late last week. A new prime minister will be named to head the coalition government, with fresh elections forecast for early next year.