Gains in miners and banks helped lift Britain's top share index 0.2 percent early on Tuesday as concerns about Europe's fiscal problems eased somewhat, but investors stayed cautious and moves were muted.
By 0843 GMT, the FTSE 100 was 12.04 points up at 5,104.37 after it closed up 0.6 percent on Monday lifted by gains in rebounding miners and strength in defensive stocks.
Concerns about the fiscal stability of Greece, Portugal and Spain have rattled global markets over the last two weeks, curbing the appetite for riskier assets, but investors began to reassess the seriousness of the problems, lifting bank stocks.
Barclays, HSBC, Standard Chartered, Royal Bank of Scotland and Lloyds Banking Group gained 0.9 to 2.9 percent.
But the gains were relatively slim after sharp falls seen last week as investors were reluctant to take big positions with such uncertainty in the air, analysts said.
"The market has been going through a fret and no one wants to take big positions, so they are hiding behind hedges and waiting to see what happens," said Justin Urquhart-Stewart, investment director at Seven Investment Management, in London
Pointing to a slightly more benign economic outlook, the Royal Institution of Chartered Surveyors said its monthly house price balance — which represents the net percentage of surveyors who report higher rather than lower house prices — rose to +32 in January from +30 in December.
That was well above the consensus forecast of +28 and not far from November's three-year high of +35. Also providing evidence of a stronger property market, British Land was one of the top gainers on the blue-chip index, up 2.2 percent after it posted an 18 percent rise in third-quarter net asset value.
Peer Land Securities was the top FTSE 100 gainer, up 3.8 percent.
MINERS GAIN
Miners were the biggest support to the index as metal prices regained some ground after sharp falls last week.
Rio Tinto, Xstrata, Lonmin, Anglo American, Kazakhmys and BHP Billiton gained 1 to 2.6 percent.
On the negative side, British retail sales fell in January to record the worst performance for that month in 15 years, a survey by the British Retail Consortium showed on Tuesday.
The BRC said the value of sales last month was 0.7 percent lower than a year ago when measured on a like-for-like basis. That followed a 4.2 percent annual gain in December.
Energy stocks were the biggest drag on the index with crude prices pinned near $72 per barrel. BG Group, BP, and Royal Dutch Shell fell 0.4-0.5 percent.
December UK trade figures will be released at 0930 GMT on Tuesday, with the global trade balance expected to have reduced to -6.63 billion pounds, down from -6.784 billion pounds in November.
The non-EU trade deficit is seen rising to -3.15 billion pounds, from -3.032 billion pounds in November.
Little significant U.S. economic data is due for release, although December wholesale inventories could attract some attention at 1500 GMT.
