Three days from a deadline to increase the US debt ceiling,investors remain focused on developments in Washington. Most think a deal will be reached in time and stock markets were holding up Monday.
The US has to increase the amount of debt it can carry by October 17 or face a possible default on its debt,a scenario that could derail the US economic recovery and roil international markets.
In Europe,Germanys DAX closed flat at 8,723.81 while the CAC-40 in France rose 0.1 per cent to 4,222.96.
The FTSE 100 index of leading British shares ended 0.3 per cent higher at 6,507.65.
Earlier,trading in Asia was muted,with markets in Tokyo and Hong Kong closed for holidays.
Outside of those major financial centres,Chinas Shanghai Composite Index rose 0.4 per cent to 2,237.77 while South Koreas Kospi was off 0.2 per cent at 2,020.27. Australias S&P/ASX 200 shed 0.4 per cent to 5,207.90.
In the US,stocks rose on Monday,rebounding from losses,as plans for President Barack Obama and Vice President Joe Biden to meet congressional leaders raised hopes a resolution to the fiscal impasse was close.
Stocks had dipped after weekend talks failed to reach a solution on the debt limit.
The Dow Jones industrial average was up 0.28 per cent at 15,280.15 while the broader S&P 500 index was up 0.24 per cent to 1,707.21
The dollar,as it has since the budgetary crisis,bore the brunt of the nervousness,shedding 0.28 per cent against the safer option of the yen to trade at around 98.28 yen.
The greenback also slipped 0.44 per cent against the Swiss franc at 0.9082 francs,while the euro rose 0.27 per cent to $1.3578.