World equities steady after EU confusion

European markets steadied on Tuesday, a day after they were roiled by a suggestion from a leading European finance official that the Cyprus bailout was a model for the future.

After initially greeting the bailout of Cyprus, stocks and the euro sank on reports that Jeroen Dijsselbloem, who chairs the meetings of the finance ministers of the 17 European Union countries that use the euro, said the Cyprus bailout was a template. Though he later attempted to retract his comments and described Cyprus as a "specific case with exceptional challenges," Dijsselbloem has left the impression that those with bank deposits above the uninsured level of €100,000 may be tapped in any future bailout. Investors monitor stock information at a brokerage house in Hefei, Anhui province, on Tuesday. The Shanghai Composite Index lost 1.2 per cent to 2,297.67 points while the smaller Shenzhen Composite Index fell 0.7 per cent to 953.36 points.

"Dijsselbloem may have done his utmost yesterday to initiate global panic in financial markets ... but fortunately the downside for equities has been relatively contained, at least for now," said Fawad Razaqzada, market strategist at GFT Markets. In Europe, the FTSE 100 index of leading British shares was up 0.1 per cent at 6,385 while Germany's DAX rose 0.3 per cent to 7,894. The CAC-40 in France was 0.7 per cent higher at 3,754. The focus will likely remain on the fallout from the Cyprus deal, especially as the country's banks are all scheduled to stay closed until Thursday. Before a late on Monday night decision, all but the Bank of Cyprus and Laiki, were due to reopen on Tuesday, having been closed for 10 days.