The London market hovered around its opening level today as gains from banking stocks were offset by sharp falls among retailers.
By lunchtime the Footsie was down 7.9 points at 4001.6 after trading within a narrow range during the morning’s session.
The subdued performance followed a sharp surge yesterday, when the market was boosted by a jump on Wall Street.
But expectations that the Dow Jones Industrial Average will open lower when dealing starts this afternoon weighed on London and trading remained subdued.
Tom Hougaard, trader at City Index, said: “It seems as if most traders are still on holiday and we do not expect a clear picture until Monday.”
Among London stocks, banks and insurers pushed ahead but retailers offset the gains.
Financial stocks edging higher included HSBC, up 10.5p at 711p, Barclays rising 5.5p at 399.5p and Standard Chartered 10p ahead at 727.5p.
Among the insurers, Norwich Union-owner Aviva rose 7.5p to 483.5p, rival Prudential lifted 6p to 465p and Legal & General was up 12p at 101.25p.
However, there were signs of nerves in the retail sector as a raft of high street firms saw shares tumble.
Analysts said the fall was in continued reaction to a disappointing survey yesterday about sales in the run-up to Christmas, and ahead of a range of trading updates expected from retailers over the coming weeks.
Electronics retailer Dixons tumbled 5%, off 8p at 141.75p, B&Q-to-Comet group Kingfisher fell 6.75p to 220.5p, Argos owner GUS eased 14p to 572p and Boots lost 16p to stand at 578p.
Supermarkets were also heading lower, with Tesco down 3.75p at 192.2p and J Sainsbury off 2p at 282.15p.
Among smaller retailers, MFI Furniture slipped a penny to 110p, Woolworths also fell a penny to 36p, HMV was down 1.5p at 118p and Selfridges slipped 1.5p to 230p.
However some analysts said the share falls were overdone, adding anecdotal evidence showed high street spending improved in the days before the holiday.
One of the session’s biggest movements came from troubled office group Regus, after reports said New York-based investment firm Indigo Capital was considering a takeover bid.
Shares in Regus, which have fallen from a high of 400p in 2001, surged 36% - up 4p to 15.25p.
Other risers included Irish airline Ryanair, up 28.5p at 474.5p as it said it carried more than 670,000 passengers in December – a 46% increase on its December 2001 total. FTSE 100 rival British Airways also gained, up 3.25p at 146.25p.