WORLD markets struggled to make progress today after another meeting on the eurozone debt crisis failed to ease traders’ nerves.

French President Nicolas Sarkozy and German Chancellor Angela Merkel pledged their commitment to keeping all 17 countries including Greece in the eurozone but the meeting produced nothing substantial enough to allay market fears.

The FTSE 100 Index dropped 37.4 points at 5612.3, while the Cac-40 in France and the Dax in Germany were also lower, while Wall Street’s Dow Jones Industrial Average was flat as the London market closed.

The pound was up against the dollar at 1.54 as the greenback weakened following recent gains. But it was down against the euro at 1.21.

The renewed nerves around the eurozone hit the banking sector, with Royal Bank of Scotland falling 2% or 0.4p to 20.1p, Barclays dropping 4% or 8.3p to 178.1p, Lloyds Banking Group off 0.9p at 26.2p and HSBC shedding 6.8p to 491.4p.

Retail stocks proved largely resilient despite fresh gloom for the sector after supermarket chain Morrisons revealed lacklustre underlying sales growth of 0.7% over the key Christmas trading period.

This represented a slowdown on its stellar form of late, but its shares still rose 0.2p to 311.5p following early falls.

It was a mixed picture for rivals Tesco and Sainsbury’s, who are also due to update the market this week. Sainsbury’s made slight gains of 1.2p to 300p but Tesco fell 0.5p to 390.5p, amid expectations it will post one of its weakest Christmas trading updates in several years.

Marks & Spencer was also among the fallers, down 2.2p at 308.5p.