World Stocks Hold Steady After US Housing News

Despite the modest rally in the wake of the housing data, investors remain cautious about chasing the markets too high, what with key economic releases due this week. Perhaps of most importance will be Friday's U.S. non-farm payrolls report for May where investors will be looking to see if the recent better than expected U.S. economic data is being translated into more modest job losses.

The news that a leading Barclays shareholder was looking to cash in also stoked concerns that the market rally over the last 10 weeks or so may have been overdone. Barclays, which did not want to raise capital from the British government and opted for Middle Eastern investors instead, saw its share price fall by more than 13 percent. Lloyds Banking Group PLC and Royal Bank of Scotland Group PLC — both majority-owned by the government — were dragged lower too.

"Today's sale of Barclays shares may well act as something of a wake-up call for those sitting on recent short-term gains in the banks — a reminder that nothing goes up for ever," said Anthony Grech, market strategist at IG Index.

"It could well prove to be at least a temporary cap in the strength we have seen in this area within the last few months as investors book some profits and wait to see what happens next," he added.