After registering sharp declines early on, stock markets across Europe had clawed back losses by the close of trade on Monday, as concerns of a contagious bank run across the Eurozone periphery were eased.
Markets suffered a steep sell-off in the morning session after this weekend's controversial bailout package for Cyprus proposed a one-time levy on customer accounts, sparking a frantic race to withdraw cash from ATMs and banks across the country.
Fears of contagion dampened sentiment across the continent early on, but indices bounced off their lows as there were no signs of bank runs elsewhere, especially in Spain.
"With the immediate threat of a run on European banks gone for now, traders took full advantage of this morning's sell-off and bought the dip, prompting a recovery in most indices," said Market Analyst Craig Erlam from Alpari this afternoon.
While the aid package for Cyprus had been trimmed from the initial €17.5bn amount (previous estimates) to €10bn, headlines focused on the plan for Greek depositors to share some of the burden to make up the difference. The government said it would impose a one-time tax on customer accounts once banks re-open on Tuesday following a bank holiday, though this proposal still requires the approval in parliament.
The tax, which will allow Cyprus to raise around €6.0bn, was the country's "least painful option", according to President Nicos Anastasiades. Otherwise, he said that Cyprus would have to exit the Eurozone.
Matt Basi, the Head of UK Sales Trading at CMC Markets, said: "The willingness to stand behind the single currency shown by voters on the peripheries of the union - in the face of mass unemployment and mandatory austerity measures - has been nothing short of astonishing, but if the Eurozone's leaders vote to cut out the middle man and start helping themselves to people's savings, it's unlikely that they'll avoid a significant backlash."
FTSE 100: M&S holds on to gains despite denial from Qatar
Takeover speculation surrounding High Street retailer Marks & Spencer (M&S) pushed the stock sharply higher today, but an outright denial by rumoured Qatari bidders failed to dampen the share price in afternoon trade. Ronnie Chopra, the Head of Strategy at Tradenext, said that there is very little bid premium priced into the stock at current levels "plenty of upside" to 400p.
Leading the downside were the miners as risk appetite was scaled back. ENRC dropped around 7.0% ahead of its full-year results on Wednesday when it is expected to report a drop in profits. Kazakhmys, Polymetal and Glencore also suffered sharp losses in afternoon trade.
Banks didn't fare much better with Barclays and RBS finishing firmly in the red. However, HSBC bucked the trend after Nomura reiterated its 'buy' rating for the stock, saying that the lender (along with StanChart) is its sector preference.
Biopharmaceutical company AstraZeneca finished lower after confirming that it is axing 1,600 jobs as part of plans to invest in new research and development centres in the US, UK and Sweden.
Insurance and pensions firm Prudential was in the red after UBS downgraded it from 'buy' to 'neutral' following the stock's recent outperformance. Cruise operator Carnival also sunk after Exane BNP Paribas cut the shares
FTSE 250: Essar Energy gains on news of new CFO
India-focused energy firm Essar gained after saying that Chief Financial Officer P Sampath will be succeeded by Deepark Maheshawri, who has a "strong track record of providing strategic financial and capital markets advice across a number of industries".
John Laing Infrastructure Fund, a public private partnership infrastructure firm, was also on the rise after it posted a solid increase in its annual portfolio value while lifting net asset value and its dividend payment.
Meanwhile, Ocado retreated after making strong gains at the end of last week on the back of an upbeat set of results and a potential tie-up with Morrison.
FTSE 100 - Risers
Marks & Spencer Group (MKS) 398.10p +6.87%
Aberdeen Asset Management (ADN) 420.30p +2.19%
Babcock International Group (BAB) 1,090.00p +1.77%
Tate & Lyle (TATE) 832.50p +1.77%
Capita (CPI) 893.50p +1.36%
Croda International (CRDA) 2,665.00p +1.18%
Smiths Group (SMIN) 1,328.00p +1.14%
Amec (AMEC) 1,072.00p +1.13%
Next (NXT) 4,134.00p +1.08%
Experian (EXPN) 1,170.00p +1.04%
FTSE 100 - Fallers
Eurasian Natural Resources Corp. (ENRC) 321.90p -7.18%
Kazakhmys (KAZ) 505.50p -6.13%
Barclays (BARC) 305.95p -4.41%
Polymetal International (POLY) 880.50p -3.88%
Royal Bank of Scotland Group (RBS) 297.30p -3.44%
Prudential (PRU) 1,115.00p -3.38%
Xstrata (XTA) 1,135.50p -2.49%
Vedanta Resources (VED) 1,132.00p -2.41%
Glencore International (GLEN) 378.65p -2.37%
Carnival (CCL) 2,323.00p -2.35%
FTSE 250 - Risers
Essar Energy (ESSR) 153.30p +4.29%
IP Group (IPO) 140.90p +3.68%
Berkeley Group Holdings (The) (BKG) 2,036.00p +3.09%
WH Smith (SMWH) 742.00p +2.70%
Greggs (GRG) 518.00p +2.68%
Afren (AFR) 150.60p +2.66%
Bovis Homes Group (BVS) 667.00p +2.62%
Carpetright (CPR) 656.50p +2.58%
PayPoint (PAY) 890.00p +2.48%
Rank Group (RNK) 173.00p +2.37%
FTSE 250 - Fallers
Ocado Group (OCDO) 163.00p -11.07%
COLT Group SA (COLT) 128.80p -4.94%
St. Modwen Properties (SMP) 252.30p -4.79%
Ferrexpo (FXPO) 197.70p -3.98%
Bumi (BUMI) 333.50p -3.97%
Petra Diamonds Ltd.(DI) (PDL) 125.10p -3.77%
Dunelm Group (DNLM) 822.50p -3.63%
Lonmin (LMI) 317.10p -3.62%
JD Sports Fashion (JD.) 740.50p -3.58%
Anite (AIE) 129.80p -3.21%