The top share index fell on Tuesday as doubts remained about financial stability in the euro zone after Greece secured its bailout package from its international creditors.
London's blue chip index <.FTSE> was down 24.94 points, or 0.4 percent at 5,920.31 by 11:38 a.m., creeping back to its recent range between about 5,850 and 5,920 and off the seven-month closing high it reached on Monday.
While the 130 billion euro (108.7 billion pound) rescue averts a default by Greece next month and near-term catastrophe for financial markets, traders said the deal had been largely priced in by markets.
Bonds -- assets most affected by debt problems in Europe -- showed little reaction with debt yields in other distressed euro zone countries such as Italy and Spain easing only slightly, suggesting there remained concerns over the longer term outlook.
FTSE 100 volumes were weak too, about 30 percent of their 90-day average around midday, highlighting concerns among fund managers about pumping fresh cash into the market when longer term issues surrounding Europe's debt situation remained.
The deal in addition to the long term refinancing operation, and creation of the EFSF are steps towards euro zone stability, but none are more than temporary fixes, David Miller partner at Cheviot which has about 3.5 billion pounds of assets under management.
The lack of economic growth in peripheral Europe and structural imbalances are slowly being mixed into the crisis, he said.
Atif Latif, director of equities and derivatives at Guardian Stockbrokers, remained bearish on the short-term outlook for the FTSE 100, which he believes will test the 5,500-5,550 area.
Some of the equities which led the FTSE 100 higher in expectation of a deal for Greece eased slightly around midday as investors looked for the next catalyst to drive the market higher.
Banks shed around 0.5 percent, although the sector is up more than 23 percent in 2012.
Integrated oils and oil explorers were among the top fallers, with investors taking profits after the firms rallied in the previous session when oil rose to around $120 a barrel on concerns over supply disruptions ranging from Iran to Sudan to the North Sea.
International Airlines Group
Miners escaped the slight sell off in riskier assets, as Deutsche Bank raised earnings forecasts within the sector to include upgraded base metal price expectations for 2012, after industrial metals prices made an unexpectedly strong start to the year, appreciating by about 10-12 percent.
That trend continued on Tuesday, with copper, zinc and nickel all up between 1.5 percent and 2 percent.
Improved economic data in the U.S., a growing sense that a resolution in Europe is not too far off and expectations that China will avoid a hard landing have all lent to a low-volume drift upwards in metals prices, Deutsche Bank said.
We expect this to remain the case through 2012 for three matters of necessity: 1) China must keep growing, 2) America must keep spending and 3) Europe must stay united. We expect Authorities to continue to act to maintain these necessities, it said.
Deutsche Bank raised its price target on miner Vedanta Resources
The potential for POG to bring forward high-grade ore could materially enhance near-term estimates, said Nomura.
Also preventing steeper decline for the FTSE 100 was the prospect of U.S. markets returning in bullish mood having been closed on Monday for the Presidents Day holiday.
In the United States, January's Chicago Fed index will be released at 1330 GMT.
(Writing by David Brett; editing by Sophie Walker)