The top share index ended flat on Tuesday with banks and retailers falling and sentiment hurt by credit agency Standard & Poors which warned of a possible downgrade to most euro zone countries.
At the close, the FTSE 100 index <.FTSE> index was up 0.76 points or 0.01 percent at 5,568.72 following a see-saw session, having closed at a five-week high on Monday.
Banks were the main drag on the blue chips, led by global lender HSBC
Markets remain quiet and range bound as investors wait to see whether the summit in Europe can lead to a successful outcome for the single currency. Whilst the spectre of downgrades remain, the European bourses are finding it hard to reach positive territory, said Mic Mills, head of electronic trading at ETX Capital.
The EU said the euro zone's economy barely grew in the third quarter, with collapsing business confidence and slowing industry pointing to a recession and likely giving the European Central Bank grounds for an interest rate cut this week.
Retailers suffered after a British Retail consortium survey said the sector saw its biggest annual fall in underlying sales since May last month after widespread discounts failed to lure pre-Christmas shoppers.
Marks & Spencer
Analysts at Singer Capital Markets cut their clothing sector profit forecasts, taking them 5 percent below consensus on average to reflect how difficult October and November have been, and how margins will probably come under intense pressure in December.
Seymour Pierce said the results were ahead of its expectations and upgraded Wolseley's rating to hold from sell.
Otherwise defensively-oriented stocks dominated the blue chip leader board with drugmakers GlaxoSmithKline
Technical analysis of the FTSE 100 index was cautious.
Currently the indices appear to have reached an indecision level with reversal patterns providing an early indication that a pullback could be in the making, said Sandy Jadeja, Chief Technical Analyst, at City Index.
If we do see a correction then it is probably going to be short term followed by a further move higher. The short term trend has turned bullish given last week's price action. As long as momentum remains bullish then December could end on a positive note but remain cautionary leading into January 2012.
(Editing by Elaine Hardcastle)