Britain's top share index drifted lower in early trade on Wednesday, as losses in energy stocks, weighed by the softening price of oil, offset gains in miners.
At 0940 GMT, the FTSE 100 was down 9.07 points, or 0.2 percent at 5,489.64, having closed down 0.7 percent at 5,498.71 in the previous session when China's central bank surprised markets with a clear sign of tighter monetary policy.
"We should level out. Having had six to nine months of very positive gains … it is necessary to have a pause and January is no better time to have that pause," said Howard Wheeldon, strategist at BGC Partners.
Miners bounced back from the previous session as metal prices began to pare to losses, aided by some positive broker comments.
Vedanta Resources, up 1.5 percent, benefited from Morgan Stanley raising its target price.
BHP Billiton, Rio Tinto, Anglo American, Eurasian Natural Resources and Kazakhmys rose 0.6-2.6 percent.
Life insurers were again on the front foot with Standard Life, RSA Insurance, Aviva and Prudential up 0.7-1.1 percent.
While mid-cap insurer and wealth manager St James's Place added 3.4 percent after BofA Merrill Lynch upgraded its recommendation to 'buy' from 'neutral', citing recovering asset levels and valuation as catalysts.
Supermarkets extended gains from Tuesday when Tesco, the world's fourth-biggest retailer, smashed Christmas sales growth forecasts in its main British market.
Tesco was up 1.2 percent, while peer Wm. Morrison added 1.1 percent and J Sainsbury gained 0.5 percent.
Defensives were also high on investors wanted lists as risk appetite fluctuated. Centrica, National Grid, Imperial Tobacco, GlaxoSmithKline and AstraZeneca were among the risers, up 0.5-0.9 percent.
OILS WANE
Energy issues fell for a second session as crude prices fell below $80 per barrel. Royal Dutch Shell shed 1.5 percent, also hurt by a downgrade to 'underweight' from 'equalweight' from Morgan Stanley.
BP, Cairn Energy and Tullow Oil shed 0.3-2.5 percent.
Banks were also lower as investors took their cue from the sell-off in New York overnight, which was triggered by concerns over a potential U.S. government levy on banks, while France's Societe Generale issued a profit warning.
Lloyds Banking Group, HSBC and Barclays lost 0.7 percent to 1 percent.
BG Group bucked the trend rising 0.5 percent as Collins Stewart raised its target price to 1,375 pence from 1,250 pence and repeated its 'buy' rating.
On the economic front, British industrial output rose slightly faster than expected in November, with a jump in oil and gas extraction outweighing a weaker-than-expected manufacturing performance.
