Britain's top share index shed 0.4 percent by midday on Wednesday, with falls by banks and oils offsetting gains by miners, Vodafone (VOD.L) and some defensives.
By 1155 GMT, the FTSE 100 index .FTSE was 21.22 points lower at 5,290.95 as investors paused for breath after sharp gains on Tuesday, when the index rose 2.3 percent in its biggest one-day gain in over four months as worries receded over Dubai's debt problems.
Sentiment is still very fragile ... most people would still be expecting to see the market fall further, said Arifa Sheikh-Usmani, equity trader at Spreadex.
Some investors are still waiting for more of a selloff than we saw last week ... (but) there are plenty of buyers waiting to pick things up on the cheap, she added.
Banks were under pressure, led by Royal Bank of Scotland (RBS.L), down 6.7 percent, as The Times reported Britain's Treasury looked set to clash with institutional investors in RBS after it took control of the bank's bonus pool
A cautious note from Credit Suisse on the UK banking sector also weighed. Barclays (BARC.L), HSBC (HSBA.L), Lloyds Banking Group (LLOY.L) and Standard Chartered (STAN.L) shed 1.2 to 4.5 percent.
Energy stocks retreated as the crude price CLc1 slid 1 percent after U.S. industry data showed domestic crude stocks rose much more than expected last week.
BG Group (BG.L), BP (BP.L) and Royal Dutch Shell (RDSa.L) fell 0.7 to 1.2 percent.
Broker comment also impacted, with Cairn Energy (CNE.L) losing 2.6 percent after Citigroup cut its target price 2,735 pence from 3,745 pence.
Severn Trent (SVT.L) was one of the top FTSE 100 fallers, down 2.7 percent as the stock traded ex-dividend.
Overall, ex-dividend factors took 2.39 points off the index with AB Foods (ABF.L), Johnson Matthey (JMAT.L) London Stock Exchange (LSE.L), National Grid (NG.L), and SABMiller (SAB.L) all also losing their payout attractions.
INVESTORS DIG MINERS
Miners were in demand again as base metal prices continued to firm and gold hit a record high above $1,200 per ounce, boosted by a weaker dollar.
Broker comment also provided support. Vedanta Resources (VED.L) added 1.3 percent as Goldman Sachs raised its rating to buy from neutral in a review of the European metals and mining sector.
Platinum miner Lonmin (LMI.L) rose 1.4 percent as Investec raised its rating to buy, with the broker upping its target for mid cap Aquarius Platinum (AQP.L), ahead 4.3 percent.
Eurasian Natural Resources (ENRC.L) gained 2.4 percent, helped by a recent upgrade from Credit Suisse, while Randgold Resources (RRS.L), Rio Tinto (RIO.L), Anglo American (AAL.L), and Kazakhmys (KAZ.L) took on 0.2 to 1.9 percent.
Kazakhmys has cut costs by 20 percent since January and might end the year below its forecast cost range, Finance Director Matthew Hird said on Tuesday.
Among individual issues, mobile telecoms heavyweight Vodafone added the most points to the blue-chip index, up 2 percent as Credit Suisse hiked its target price to 160 pence from 150p.
Oil services firm Amec (AMEC.L) rose 1.4 percent as Evolution Securities upped its rating to buy from add.
Sage Group (SGE.L) gained 1.8 percent, recovering after opening falls as investors warmed to the accountancy software firm's in-line results, with Deutsche Bank repeating its buy rating.
Defensive sectors such as pharmaceuticals, food producers and tobaccos gained, with British American Tobacco (BATS.L), Unilever (ULVR.L) and AstraZeneca (AZN.L) up 0.1 to 1.4 percent.
In the U.S., indications of what markets might expect from Friday's non-farm payrolls report could emerge from the ADP National Employment private sector survey and the November Challenger Layoff report later in the session.