HOPES of an imminent bailout deal for debt-laden Cyprus steadied losses on world markets as the country said it was edging closer to a solution.
The deputy leader of the Cypriot ruling party said they were close to a compromise on measures to meet Monday's deadline set by the European Central Bank to come up with the money to unlock a €10 billion (£8.5bn) bailout.
London's FTSE-100 index closed 4.21 points higher at 6392.76, helped by a positive start to trading on Wall Street as the Dow Jones industrial average rose more than 70 points.
The Dax in Germany and the Cac 40 in France both regained their poise after hefty losses yesterday, finishing the session close to their opening marks.
With its ultimatum looming, Cyprus took a first step toward financial consolidation by agreeing to spin off Greek units of its banks to Greece.
The euro gained strength on the optimism, with the pound falling against the single currency to 1.17. Sterling con-tinued to edge higher against the US dollar, at 1.52.
BP also helped prop up the London market as it rose 2%, or 8.3p, to 457.7p after it said it would return $8bn (£5.3bn) to shareholders as a result of the unwinding of its Russian joint venture TNK-BP.
The oil giant now holds 19.75% of Rosneft, which has become the world's biggest publicly traded oil company.
Drugs giant AstraZeneca was also doing well as investors backed chief executive Pascal Soriot's strategy for reviving the Anglo-Swedish company.
In a presentation to analysts in New York yesterday, he pledged to beat current forecasts for revenues in 2018, driven by greater focus on research and development and in areas such as respiratory medicines. A £1.5bn restructuring plan will also cut another 2300 jobs. The shares rose 103p, or 3%, to £32.36.
BT Group topped the risers board, up 10.4p to 276.7p, after Nomura lifted its price target on the stock amid hopes for an easing in its regulatory burden.
Burberry shares fell 4%, or 57p, to 1330p after rival luxury brand Mulberry issued a profits warning on the back of dis-appointing trading over the past 10 weeks. Mulberry slumped 211p to 1024p, a fall of 17%.
Outside the top flight, shares in emergency repairs business Homeserve fell 11.6p to 211.4p, or 5%, after it said it expected UK customer numbers to fall to around 1.9 million by next March.
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