Britain's top share index was flat in early trade on Monday as commodities came under pressure again on heightened concerns China would further tighten monetary policy, outpacing gains in utilities.
By 0911 GMT, the FTSE 100 was down 1.25 points at 5,187.27, consolidating after gains of 0.8 percent on Friday.
Commodity issues retreated as the prices of crude oil and metals fell back on concerns about global growth and sluggish demand.
Fresh economic data out of China, the world's second-largest energy consumer, heightened concerns that Beijing would further tighten monetary policy.
An official purchasing managers index on Monday remained firmly in expansionary territory, while a companion poll by HSBC scaled an all-time high — with both reports showing evidence of a further increase in cost pressures.
Energy issues fell as oil prices dropped below $73 a barrel. BG Group and BP, which report fourth-quarter results later this week, shed 1 percent and 0.2 percent respectively.
Miners were lower as metal prices ran back across the board. Xstrata, BHP Billiton and Rio Tinto were down 0.4 to 0.6 percent.
"The ongoing Chinese monetary tightening issue is continuing to cast a shadow over this market and a weak session on Wall Street on Friday is not helping either," said Richard Hunter Head of UK equities at Hargreaves Lansdown.
Banks handed back some of Friday's gains, with HSBC, Standard Chartered and Lloyds Banking Group off 0.1 to 0.4 percent.
Royal Bank of Scotland shed 1.2 percent after energy news service SparkSpread reported JPMorgan Chase only wants the non-U.S. operations of RBS Sempra, Royal Bank of Scotland's commodities unit, having previously entered talks to buy the whole business.
Imperial Tobacco dropped 0.8 percent as investors exhibited caution ahead of its trading update due on Tuesday.
Peer British American Tobacco was 0.2 percent lower.
Fund firm Schroders was the top faller, down 1.9 percent after Credit Suisse downgraded its rating to "neutral" from "outperform".
UTILITY DEMAND
Utilities rose after the Sunday Times reported that mid cap Northumbrian Water, which holds its AGM today, could receive a 1.7 billion pound takeover offer from Canadian pension fund, the Ontario Teachers' Pension Plan, which already holds a 27 percent stake in Northumbrian.
Northumbrian added 10 percent, while blue chip peers Severn Trent and United Utilities gained 4.5 and 4.1 percent respectively
British Airways, was up 1.2 percent after the Financial Times said its planned alliance with American Airlines and Iberia has moved closer to securing regulatory approval, after the European Commission confirmed it had begun consulting with rival airlines.
Airlines were also in favour as Goldman Sachs issued a bullish note on the sector, and as Irish airline Ryanair increased its full-year profit forecast and posted a narrower-than-expected third-quarter loss.
Ryanair and mid-cap low-cost airline easyJet added 5.4 and 1.4 percent, respectively. British Airways is due to report third-quarter figures on Friday.
Among individual gainers, Rolls-Royce climbed 2.2 percent as RBS raised its target price for the aerospace engineer to 700 pence from 430 pence.
