Britain's top shares saw an early rally snuffed out on Wednesday, with falls in energy stocks weighing, although miners and banks recovered some of the previous session's sharp losses as the index struggled to hold above 2012 lows.
At 0812 GMT, the UK blue-chip index was down 4.10 points, or 0.1 percent, at 5,591.45, having dived 2.2 percent on Tuesday, its second-worst percentage drop this year and putting it back close to the starting point for the year at 5,572.
After a shocking session on Tuesday, closing within a few points of the three-month lows circa 5,583, this could well provide a floor for the index as a move here will effectively wipe out FTSE gains in 2012, said Darren Sinden, senior sales trader at Silverwind Securities.
Weakness in energy stocks <.FTNMX0530> dragged the blue chip index back from modest early gains as the crude price eased back, with BP
Miners <.FTNMX1770> saw a modest bounce back, having led the fallers in the previous session, with the sector drawing some support from better than expected first-quarter numbers overnight from Alcoa
The U.S. aluminium producer kicked off the Wall Street earnings season with a surprise first-quarter profit - following a loss in the fourth quarter of 2011 - as global markets improved, especially in the aerospace and automobile sectors.
The results, which beat analysts' forecast for a loss, sent the company's stock up 6 percent in after-hours trading on the New York Stock Exchange.
A rally in copper prices also helped the mining sector, with the base metal regaining some ground after sliding nearly 4 percent in the previous session, a sell-off some analysts thought may have been overdone.
It won't be easy but if we do make a floor in FTSE at three-month lows, we will look for any upturn in the mining sector, which can recover quickly on positive macro data - particularly that from China, as leading indicator for the wider market, Silverwind's Sinden added.
Banks <.FTNMX8350> also saw a modest rally, led by Barclays
Barclays has the largest exposure to Spain of any British bank, Oriel Securities noted.
Broker comments spurred some of the biggest individual blue-chip moves early on.
Security services group G4S
On the downside, pay-TV firm BSkyB
And telecoms carrier BT Group
While we remain positive on a longer-term view, regulatory drags in Openreach from April may contribute to 2012/13 revenue guidance being reduced at the FY results on 10 May, while hopes for a dividend hike may be disappointed, JPMorgan said.
Ex-dividend considerations clipped 1.31 points off the FTSE 100 index on Wednesday, with BG Group
(Editing by Catherine Evans)