Britain's top shares ended flat on Wednesday as Cable & Wireless was buoyed by a restoration of its dividend payout but GlaxoSmithKline led a late retreat after the drug giant faced a US lawsuit.
GSK shares fell 2.9 percent after it was sued by the New York Attorney General Eliot Spitzer, who said GSK withheld negative information about its antidepressant drug Paxil.
Shares in Europe's biggest drugmaker were also knocked by a fall in the US dollar, which reduces sales in sterling terms. The dollar's dip also unsettled miners, and BHP Billiton dropped 3.6 percent and Anglo American lost 2.3 percent.
The FTSE-100 closed up 0.1 point at 4,422.8 to halt a two-day slide, but it was tugged 40 points from its morning peak back towards the bottom of the tight 4,396-4,471 range it has occupied for more than two weeks.
"There does appear to be some fundamental demand from institutions for equities, but no confidence to drive the market further at the moment," said Steve Russell, head of research at Ruffer Investment Management.
Russell said UK equities were not expensively valued, but there was concern that high oil prices and the prospect of rising interest rates could slow economic growth.
Telecoms company C&W provided the day's bright spot, jumping 6.2 percent after it said it had turned around a decline in sales at its core UK business and reinstated a dividend of 3.15 pence per share, more than had been expected.
"The dividend pay-out of 3.15 pence ahead of a consensus forecast of two pence perhaps gives an indication of management's confidence in future cash flows," said Chris Alliott, telecoms analyst at Nomura.
Oil stocks were firm as Opec producers are expected to approve higher supply quotas at a meeting on Thursday, but dealers said worries of more attacks on oil facilities were expected to keep crude prices high.
BG Group rose 2.2 percent, also helped by upbeat comments on its earnings growth by J.P. Morgan, while BP added 1.1 percent.
Clothing retailer Marks & Spencer recovered from an early dip to end up 0.1 percent at 366p. Its shares have rallied 26 percent since billionaire retail entrepreneur Philip Green said he was considering a bid, which dealers said could surface on Thursday.
The takeover talk spilled over to MFI Furniture Group, up 5.2 percent on speculation its management could be considering a buy-out that would value the firm at over one billion pounds, dealers said. MFI declined to comment.
M&S was one of six FTSE stocks whose shares traded ex-dividend, meaning investors no longer qualify for the latest payout. Among them, utility National Grid and pubs chain Enterprise Inns both fell two percent.
Scottish Power, another ex-dividend stock, drifted 1.7 percent. It also announced the purchase of a power plant in southern England for 317 million pounds ($585 million).