Britain's top shares dipped on Monday to halt a four-day winning run as oil and telecoms stocks eased and bank Lloyds TSB drifted after its margins were knocked by tough industry competition.
But energy utility Centrica and insurer Royal & Sun Alliance rose on hopes of potential asset disposals.
Centrica added 2.3 percent after it confirmed talks to sell its car breakdown services arm, the Automobile Association. Sources said proceeds, estimated at about 1.5 billion pounds, would help pay for power station and gas field purchases, and some funds could be returned to shareholders.
Insurer Royal & Sun jumped 3.7 percent after it unveiled talks to sell its problematic UK life insurance arm, which would continue a strategic turnaround.
"It's interesting that more companies are being more pre-emptive in increasing their focus," said Steve Russell, head of research at Ruffer Investment Management. "Now businesses are having to be much more focused on their core activities, and that may be a good result of private equity activity."
The FTSE-100 share index closed down 3.6 points at 4,502.2, near the middle of the day's tight 26-point range after an early rise to 4,511 points failed to gather momentum.
"We've had a brief positive run over the last week that took us above 4,500, but this is still a market that's treading water and probably has been doing so since March," Russell said.
US shares also made a muted start to the week, and dealers said activity could remain slow as Wimbledon and other sporting events attract attention and investors could hold back before a decision on US interest rates at the end of the month.
Lloyds, Britain's fifth-biggest bank by assets, recovered from a sharp early fall to end down 0.1 percent as concern about reduced margins and tough competition countered an increase in the amount it was lending.
Oil stocks slipped as crude futures eased after Iraq resumed limited crude exports from its southern terminals after a six-day halt caused by sabotage attacks. BP lost 1.2 percent and BG Group shed 1.8 percent.
Telecoms stocks were a drag as mobile operator mmO2 fell 2.1 percent and rival Vodafone was off one percent after weekend reports revived concerns that aggressive pricing by rival 3 will intensify competition in the UK market.
Office rental firm Regus led mid-cap fallers with a 3.1 percent droop after it revealed discussions to buy US-based rival HQ Global for up to 190 million pounds.
But mid-caps generally outperformed blue-chips, and the FTSE 250 climbed 0.6 percent to 6,168.4 points.
Photo-booth company Photo-Me jumped 4.2 percent on sizeable volume of 26 million shares. Dealers said buyers had returned before results due next week, after the shares fell to an 11-month low and a large seller appeared to have backed off.
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